Big oil calls on contractors to cut costs now

Energy service contractors must cut their charges to oil and gas companies to ensure both parts of the industry thrive after the current crisis, the chief executives of two of the world’s largest oil companies said on Tuesday.

Energy service companies must drop their charges to reflect tighter margins since oil and gas prices slumped in late 2008, ExxonMobil Chief Executive Rex Tillerson and the CEO of France’s Total (told a press conference in Britain.
The French oil major might even have to put off projects if contractors do not cooperate.

“We don’t want to squeeze them but they have to understand that they have to reduce their prices,” Total’s Christophe de Margerie said at the inauguration of the South Hook liquefied natural gas terminal in South Wales.

“If they don’t understand without stopping our programmes, we might be forced to delay until they understand that this is the way it has to be, i.e., we all have to share the cost of this crisis,” the head of the world’s fourth largest nongovernmental oil group said.

Reuters