Oil prices slumped to a six-year low earlier this week. In response, oil companies around the world have been cutting jobs and exploration and production budgets.
Electric cars charging in Milton Keynes (Image: T. Larkum)
The situation has become worrying enough that the UK government today ordered a review into how low prices put the North Sea industry at risk.
For months, analysts have warned of the effect such a price dip could have on the industry.
This week, a number of companies, including fossil-fuel giants Shell and BP, announced they were reducing their budgets for 2015 and cutting hundreds of jobs as a consequence of the low oil price.
Carbon Brief looks at the cuts some of the industry’s key players are making in response to the oil price drop.
Cutting budgets and jobs
The oil price is currently around $48 per barrel, down from a high of about $115 last July. Lots of oil companies have had to adjust their budgets as a consequence. In particular, they’ve had to revise how much they’re going to spend on new projects, known as ‘capital expenditure’, or ‘capex’ for short.
Companies put jobs at risk when they reduce their capex budgets, as fewer projects mean fewer workers are needed.
Read more: Carbon Brief