The Whiting Petroleum president attributed the decision to the effects of the price war between Russia and Saudi Arabia and the covid-19 pandemic.
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The American company Whiting Petroleum Corporation, producer of shale oil, announced on Wednesday that it filed for bankruptcy protection, thus becoming the first victim of low oil prices, which have already fallen to around $ 20 per barrel. The company’s debt exceeds $ 2.2 billion.
“Given the severe drop in oil and gas prices, driven by uncertainty over the duration of the price war between Saudi Arabia and Russia and by the covid-19 pandemic, the company’s board of directors came to the conclusion that the main terms of the financial restructuring, negotiated with our creditors, provide the best way forward for the company, “said Whiting Petroleum President and CEO Bradley J. Holly.
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The company has more than 585 million dollars on its balance sheet, which allows it to continue operating normally, without material disruption to its suppliers, partners or employees, and expects to have sufficient liquidity to meet its financial obligations during the restructuring, without that additional financing is necessary.
What happened to oil prices
The disagreement between Russia and Saudi Arabia led to the collapse of oil markets, after Moscow refused to accept the cuts in oil extraction proposed by OPEC, considering that they do not favor it. The Russian state oil company Rosneft affirmed that the cuts agreed by the mentioned organization on repeated occasions always they mainly favored the us, which restored the lost volumes with its shale oil.
In response, Saudi Arabia and the United Arab Emirates raised production to a record level and prices are experiencing their biggest drop in decades, in an already oversupplied market.
The lack of agreement among the members of the OPEC + pact has been felt worldwide. An additional cut of 1.5 million barrels per day was proposed in response to the low demand for hydrocarbon, also affected by the outbreak of the new coronavirus.
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