Weighing the options for oil companies in times of crisis

Guglielmo Moscato, chairman of the Italian industrial combine ENI, recently outlined some of the strategies available to the oil industry in order to survive in the low oil price climate. We publish a slightly edited version of his remarks given at a conference in Milan organized by Gulf Publishing and Assomineraria in Milan. The extremely critical situation of prices for major energy and non-energy raw materials is creating considerable difficulty for the balance sheets and the economical-financial budgets of the producer and processing companies, and some apprehension about the prospects in the long term. The entire commodities sector, which is a global market, now finds itself exposed to numerous political crises and often to serious regional conflicts as well; to commercial and industrial decisions taken by sovereign states or their supranational bodies; to choices made by large exporting countries and to the force that is exerted by their cartels; to regional financial and exchange rate crises; to widespread and to localized economic downturns; to new technological developments; to the competition between energy sources and between different raw materials; and also to a host of other conditions including the growing pressure deriving from both worldwide and local environmental pressures.