Oil Executives Strike Confident Stance

Executives from BP, Hess and Suncor strike a confident stance in a protracted period of low oil prices.

Forced to reckon with a prolonged period of low energy prices, oil chiefs sought to portray themselves as steely survivors in an industry grappling with spending cuts and asset sales.

Many executives counted how many previous crashes they had weathered. Some took solace in the musings of philosophers from the 19th century.

“Times are tough, you’d almost call them brutal right now,” said Lamar McKay, BP PLC’s deputy chief executive officer. “But we will adapt. We will make it.”

The dour mood reflects the realization that no cavalry is coming. Energy companies are likely to stay mired—for months if not years—in a global oil glut that has sent crude prices to $30 a barrel.

That became clearer Tuesday when Saudi oil minister Ali al-Naimi told a packed ballroom here that the kingdom had no plans to cut its output to boost prices. Instead, the world’s largest oil exporter is banking on market forces to drive out companies saddled with higher production costs. That, in turn, would reduce global supplies.

Mr. Naimi said his country was prepared to withstand $20 crude if needed to thin the herd.

Oil prices, which had rallied last week on news of a tentative agreement by Saudi Arabia, Russia, Venezuela and Qatar to freeze oil output, fell 4.5% Tuesday.

Energy companies have cut more than 300,000 jobs world-wide since mid-2014, when crude-oil prices began their tumble from $100 a barrel, according to Houston consulting firm Graves & Co. Globally, nearly $1.5 trillion of spending will be canceled from 2015 to 2019, according to IHS, a consulting and analytics firm. The spending cuts will push U.S. shale output down by 600,000 barrels a day this year and by 200,000 barrels a day in 2017, according to a forecast unveiled here on Monday by the International Energy Agency.

At least 48 North American oil and gas producers have filed for bankruptcy protection since 2015, imperiling more than $17 billion in debt, according to law firm Haynes and Boone. More are soon to follow.

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