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The pandemic has wreaked havoc on the energy industry. Oil and gas companies first saw reduced demand driven by shelter in place orders, then crude oil prices crashed. Now, oil and gas companies are figuring out how and when to resume operations, and energy's role in a post-pandemic world.
We’ve compiled a snapshot on the widespread impact COVID-19 is having across the Oil & Gas industry. Learn which companies are communicating on Coronavirus and how they expect the virus to affect financial results.
- Q12020 earnings season shows US oil producers slamming on the brakes as they release drilling rigs and frac crews at an unprecedented pace
- 17 of the 28 E&P operators that have disclosed frac counts in the downturn are going to zero
- Meanwhile on the production side, voluntary shut-ins are now the norm with Lower 48 producers disclosing shut-ins ranging up to 40% of production in May
- Add it all up, and the US shale oilfield is contracting more violently than in any past downcyle
- The production response to low oil prices will likely be greater than most analysts are modeling, even today and highly constructive for oil prices when demand rebounds as the economy restarts
Here are the highlights:
[Note: We are updating this post and our compilation post to reflect the most recent commentary. Last updated 5/8.]
EOG Resources Q1 2020 Earnings call (5/08)
Q: I think one of the silver lining of the COVID-19 is that it triggered a lot of creativity, and you guys certainly have done a lot of that, as you mentioned. So what have we learned from this whole episode? And what is the -- some of the best practice that may impact your future, how you run your operation?
A: Yes, Paul. This is Bill. Every situation -- I've been with the company over 40 years, and I've been through a number of these downturns. This is certainly the most unique one that we've ever experienced. What it is really -- what we've really seen inside the company is the tremendous value that our information systems and technology has allowed EOG to make a very granular evaluation of everything we do. Every well in the company, we know about it. We have all the data. And through our decentralized organization, we've been able to analyze down to a very granular level everything we're doing. And so we've learned how important it is to have a great information systems in technology and how effective our employees have been to perform -- and most of them are working from their homes, like everybody else in the world.
Shell Midstream Q1 2020 Earnings call (5/07)
To date, the crude being impacted the most, both in terms of production as well as price, are those that are landlocked with less access to water. With the unique optionality and crude grade advantage, along with a lower marginal cost of production, we feel strongly that the Gulf will retain its long-term strength. And as always, we believe we are well positioned with one of the premier corridor networks to capture these benefits for the partnership.
Suncor Energy Q1 2020 Earnings call (5/06)
Our updated downstream guidance reflects our view of the significant demand reduction related to COVID-19 pandemic. In the markets we supply: average demand for gasoline is down 50%; jet fuel demand is down 70%; and distillate demand is down 20% versus Q1. In response to this demand reduction, we have taken the following actions. We've reduced our refinery utilizations in Q2 to approximately 65% to 75% of nameplate capacity. We've increased the relative diesel mix by 10%. We've leveraged the flexibility provided by our integrated model and midstream logistics assets, which generated over $225 million after-tax of additional value in the first quarter. And we maximized our upstream production into the refineries as feedstock.
Marathon Corp Q1 2020 Earnings call (5/05)
On Slide 11, we provide our second quarter outlook, which includes estimated throughput reductions at our facilities based on projected demand destruction from COVID-19 and associated shelter-in-place orders. We expect total throughput volumes of just over 2 million barrels per day, approximately 2/3 of our nominal -- normal operating capacity. We have temporarily idled our Martinez and Gallup facilities in response to demand destruction.
Cabot Oil & Gas Corp Q1 2020 Earnings call (5/01)
Q: Okay. Got it. That's very helpful. My other question is a lot of the optimism for 2021 seems to be based on lower supply from [gas] and oil activity. What do you think about demand for 2021, particularly in a recovery period from [COVID-19]?
A: Yes. And thanks for the question, Jeffrey. And I'll flip it to Jeff here in a second, but we're looking at certainly the lower supply and feel like the shut ins, the frac holidays, the associated gas reduction, the reduction in capital allocation going forward are all constructive to reduce supply. We feel good about the reduction in supply, and it's going to be somewhere -- probably between 8 to 10 Bcf a day reduction in supply is kind of the conventional wisdom right now. And we've seen prior to this pandemic coming through and with the start of demand loss, we were actually seeing some pretty healthy demand numbers out there. And I'll let Jeff make his comments on the outlook on both.
ONEOK Q1 Earnings call (4/29)
Q: I just want to talk a little bit about the dynamics in the Bakken, particularly as it relates to the flared gas. So -- and I guess my question is like as you get shut-ins and reduced drilling activity, will you see a reduction in flared gas as well, just naturally? And will that -- do you want to quantify or any rule of thumb to think about how that would impact the number of well connects you would need to do based on that change in flared gas?
A: Michael, it's Kevin. I'll start and Chuck or others may have some comments. But yes, like we said in our prepared remarks, there's multiple dynamics that could go on impacting flared gas. We have seen some wells shut in that had previously been flaring. So that doesn't impact our volumes, obviously. We've also seen some situations where some gas was taken off-line. But other gas that was flaring due to some pipeline or compression constraints started flowing on the system. So effectively, it was replaced, which would bring flaring down.
OMV AG Q1 2020 Earnings call (4/29)
Looking into the first quarter of 2020, it was influenced by 2 significant effects: a shock in oil supply and the global COVID-19 pandemic. While the Upstream business was substantially hit by the collapse of oil prices, the Downstream business benefited in the first quarter from lower feedstock cost and showed a strong performance. The negative impact from COVID-19 on demand was in the first quarter still rather limited as most measures of European countries, such as lockdowns, were only effective as of mid-March. Thanks to our integrated portfolio, we were able to achieve a quite resilient results in an extremely challenging market environment.
Petrochina Q1 2020 Earnings call (4/29)
In the first quarter of 2020, facing the severe and complicated global economic environment and operational situation, PetroChina has tried its best efforts to reduce the impact of the COVID-19 by taking effective measures to prevent and control COVID-19, resuming work and production in an orderly way, launching a campaign of improving quality and enhancing profitability, focusing on optimization of production and operation, and devoting major efforts to intensify the control of the investment, costs and expenses.
As a result of the outbreak of COVID-19, the decrease in demand for the oil refined products on domestic markets, the Marketing segment recorded an operating loss of RMB 16.59 billion, a decrease of RMB 20.11 billion year-on-year.
Valero Energy Q1 2020 Earnings call (4/29)
First quarter 2020 results were impacted by low product margins related to the COVID-19 pandemic and the rapid decline in crude prices. Refining throughput volumes averaged 2.8 million barrels per day, which was in line with the first quarter of 2019. Throughput capacity utilization was 90% in the first quarter of 2020. Refining cash operating expenses of $3.87 per barrel were $0.28 per barrel lower than the first quarter of 2019, primarily due to lower natural gas prices.
Q: Hope all of you are doing well. I just wanted to follow up on this question of demand. We've talked a lot about on this call 2020 demand conditions. But Joe and team, I want to get your perspective on sort of the structural questions of demand, particularly for two products, gasoline and jet. So gasoline, the thoughts around work from home and does that create a change in social behavior that has an impact on low gas demand? And jet, the willingness of the consumer to travel, I think all of us are just trying to figure out whether there's a long-term impact from some of the changes that we've seen here over the last month? Or do you view this as more cyclical?
A: Yes. Neil, this is Gary. So I think we are taking those things into account. And so where we saw a fairly sharp decline in demand to this 55% level, we would expect the recovery to be more gradual on the demand side. As people continue to work from home, we see some offsetting things. Certainly, people working from home, but then you're going to have people driving more and probably using mass transit less going forward. It's just because the social distancing is hard when you're on mass transit.
BP PLC Q1 2020 Earnings call (4/28)
These actions in no way compromise our long-term commitment to shareholders. If anything, I believe they strengthen it, and we are hugely grateful for the support we have been receiving. At the same time, we are doing everything we can to strengthen our finances. Our underlying business has been performing well, but it has been a tough first quarter due to the challenging macro environment, which included impacts to our results through quarter end as a result of lower prices, lower demand for our products and foreign exchange effects.
Starting in the second quarter, in the upstream, we expect second quarter reported production to be lower compared to the first quarter. There are significant uncertainties with regard to the implementation of OPEC+ restrictions, price impacts on entitlement volumes, divestments and market restrictions given the lower demand for oil and COVID-19 operational impacts.
Galp Energia Q1 2020 Earnings call (4/27)
The unforeseeable demand drop due to the pandemic emergency measures and the high levels of supply has led to very high crude and product inventory levels, which will put pressure on prices over the next several months. Such environment has an obvious impact in our upstream performance as we were planning on oil prices of around $65 per barrel, as we have shared with you during the Capital Markets Day.
S-Oil Corp Q1 2020 Earnings call (4/27)
The first quarter of 2020 was the worst period of time for the Company due to outbreak of COVID-19. In the first quarter the Company posted a significant operating deficit due to a messy inventory-related [growth] from the [blunt] in crude oil prices and lingering weakness of refining margin.
Eni SpA Q1 2020 Earnings call (4/24)
We think that in May, the situation in terms of transplantation and consumption will be better, especially for gasoline. Diesel was -- diesel consumption was, I can say, good also during this period because the heavy truck continued to work for transport of materials and food, so that was less impacted. But I think that we can recover also on gasoline.
Okay. Regarding supply chain and disruption due to the pandemic, the pandemic is mostly affecting those activities that requires international support and mobilization, and therefore, we are suspending our phasing, most of our drilling and especially deepwater drilling activities. While on production operation, always with the aim to protect our people, while granting production continuity, we have been able to maintain production level, thanks to the fact that we have a prevalence of local workforce in our producing countries. So we are not affected by the blockage of traveling between countries.
Neste Oyj Q1 2020 Earnings call (4/24)
The warm weather and the COVID-19 epidemic substantially limited air and road traffic and this had an increasingly negative impact on product demand towards the end of the quarter. The Marketing & Services segment had a challenging first quarter in a very competitive market, and its result was impacted by lower sales volumes caused by substantially lower demand due, as said, to the weather and the COVID-19 pandemic.
Kinder Morgan Q1 2020 Earnings call (4/22)
Our gathering and processing assets will be negatively impacted by reduced producer activity. We are seeing increased interest, however, in our Haynesville assets, but that will take some time to ramp up. Overall, reduced producer activity negatively impacts this part of our business. As a reminder, gathering and processing, when you put the gas portion of it together with the products portion, is only about 10% of our budgeted segment EBDA.
Koninklijke Vopak NV Q1 2020 Earnings call (4/21)
The COVID-19 virus is having its impact on the market in which we operate. Global oil demand is in a downward spiral with significant demand restriction for many oil products such as jet fuel and gasoline. This leads to increased interest in oil storage globally. We see this in the hubs and other locations such as Canada and Panama. The effect of this is expected to gradually materialize as from the second quarter of 2020.
Haliburton Co Q1 2020 Earnings call (4/20)
Right now, North American E&P CapEx is trending towards a 50% reduction year-on-year in 2020. Since mid-March, U.S. land rig count has fallen 34% and is expected to continue declining from here. With prices at the wellhead near cash breakeven levels, we expect activity in North America land to further deteriorate during the second quarter and remain depressed through year-end, impacting all basins. Our outlook for the international markets has also changed. In addition to the collapse of oil prices, the industry is dealing with activity interruptions due to the coronavirus pandemic. COVID-19 had minimal impact on our international operations in the first quarter, but the second quarter will be different. We are seeing restricted movements within countries, quarantine requirements for rotational staff, logistics delay due to third-party personnel reductions and in some cases, entire country closures. Different markets are impacted differently, and this will lead to significant operational disruptions at least through the second quarter.
Q: I think last time we had a discussion, you indicated maybe the digital dynamic might not have a very near term -- big near-term impact on revenue generation. So I just wanted to kind of touch base again. And given all the disruption that's happened in the industry, given the commentary you made about a number of different discussions now being had and rethinking and reshaping the industry going forward, any updates or any thoughts on how much revenue digital could potentially push, whether it's this year or whether you think it's going to get accelerated as we go into next year as well?
A: Well, look, I think it accelerates -- as I had described, I don't think any revenue is accelerating at this very moment, albeit we are seeing a meaningful uptick in new users just over the last 30 days, as I said, in our iEnergy cloud, which has been meaningful. But overall, hard to describe revenues up in a meaningful way at least right now. That said, though, the ability to reduce cost by implementing these things is in the here and the now. I mean that is like here and the now this week having an impact. And so I think the ability, for example, on our integrated projects as we -- this accelerates the acceptance by customers and the demand even by our own people to implement those tools, that de-manned rigs work remotely. All of those tools that we've been building over the last several years, we've implemented them or we've talked about them in the North Sea. With Aker BP and some others, we've been quite vocal, but we've done it with many others. So it's hard to look at that set of tools today and not ask yourself, "Why am I not using those tools today?" And so I'm really encouraged about the pace we will see. I think we'll actually see its impact will be still over the next few years as that continues to grow. But the existing tools get adopted quite quickly, I think, in this market.
Schlumberger NV Q1 2020 Earnings call (4/17)
However, toward the end of the quarter, activity started to decline in several basins due to the unprecedented drop in oil price and the increasing challenge posed by COVID-19. The most severe impact was in North America land, where customers were fast to react with a sharp 17% cut in rig count. Now going forward, you are totally right, and I think we have accelerated our remote operation and automation of some of our operations. In the month of March, we had more than 60%, 6-0, 60% of our drilling operation that have -- that were using remote operation. So we have been exploiting with success the remote operation by reducing the footprint of our people on the rig site, having very positive impact on HSE, helping and supporting them remotely with an impact on service quality and providing efficiency and cost that benefit both the operator and ourselves. So this will continue, will accelerate. We have an excellent platform internally, and we have our DELFI platform externally where our clients are starting to adopt drilling, in particular, remote operation and automation. This is accelerating as we speak. Another example, Chase, is as we were deploying DELFI, and you may have seen that into the earnings press release for Woodside, we were getting the request to accelerate due to the COVID[-19] (added by company after the call) restriction, accelerate the deployment of the cloud-based infrastructure so that the asset team, the geoscientists of our customer could work from home and have the full access to their data and to their powerful geoscience application. We're able to deploy and accelerate and with great satisfaction and success, and this has been used as an example going forward. So yes, it will be a differentiation that we'll use going forward.
Royal Dutch Shell Annual Briefing (4/16)
Q: Can you talk about whether the recent movements in the oil price has changed the way Shell thinks about the risk/reward profile of the investments in renewables or low carbon businesses compared to the upstream business? That's the first question, Ben. Let me read the second question for you as well. The second one is how does the acceleration of the reduction in carbon ambition change -- carbon ambition changes Shell's capital allocation process. Can you just talk through the economics of hydrogen and what you need for commerciality?
A: Yes. Thank you, Lydia. Thanks, first of all, for the acknowledgment and 2 really good questions. It -- of course, if you look at what is happening in oil markets, it is, of course, an overused word, but it is unprecedented. And of course, we have to understand what's going to happen next. Very hard, by the way because nobody, of course, has ever dealt with situation like this in living memory and it's, therefore, quite a challenge to predict how oil markets will play out. A lot of scenario testing, a lot of resilience testing, et cetera, is going to be needed at this point in time. Some people say, well, this is what's going to happen when we finally do the energy transition. I think that is probably a little bit overdone. I do not think the energy and certainly do not hope the energy transition will be as disruptive as this COVID-19 crisis is. But it does indeed show that -- well, first of all, that even a reduction of 20% in energy use comes with a massive change in how society looks like and what it is we can and can't do. So in a way, it does show how difficult it is to make this energy transition, but yes, I think it's fair enough. We will see probably changed attitudes, changed ways of working, maybe a certain economic downturn following from this that will all have their effects on energy markets. And with it, of course, in oil and gas markets.
ConocoPhillips Conference Call (4/05)
Q:My first question is around the production that is being ramped down in May, both in the Lower 48 and Canada. Perhaps can you give us a sense of what the level of confidence you have in bringing that production back online to full capacity or when the timing is right, perhaps from a geology or an engineering point of view, please?
A: Yes. Very confident. We don't -- we're not going to shut-in anywhere that we see any risk of reservoir damage or anything that's going to impair our ability to bring it back. You can see, in Surmont, for example, we're taking the rates, as Don said, down to the lowest level that we can while still providing enough heat and pressure to the reservoir and so that we don't damage the reservoir. The rest of the deferrals are in the unconventional reservoirs, and we don't expect any issues in there at all. In fact, we expect to see quite significant flush production when those wells come back on. So no issues.
Santos Ltd Analyst/Investor Transcript (4/2)
The unrelenting focus of Kevin and his team on our strategy to transform, build and grow around our core assets, together with our disciplined low-cost, cash-generative operating model, has positioned the company well to whether the unprecedented market conditions we are currently experiencing. As I said earlier, in response to the challenges of the COVID-19, combined with low oil prices, we acted decisively on the 23rd of March to protect our cash flow and our balance sheet. We announced cost cuts in 2020 of $550 million in capital expenditures and $50 million in operating expenditure. And we'll continue to review this as we need to over the coming months. Right now, we need to keep production going to maintain our revenues and the revenues that flow to governments so that they can fund the economic relief that's going to be required during this crisis for households and businesses across the nation.
Imperial Oil Ltd 8K (3/31)
Although Imperial is in a lower capital spending period in the cycle, the company has carefully assessed its 2020 plans and has identified opportunities to reduce spending in the near-term while maintaining focus on the lowest capital intensity, highest value-creating opportunities. Spending will focus on ensuring ongoing safe and reliable operation of Imperial’s assets, and paced investments to continue work on key growth-related projects at a level reflective of the current challenges presented by COVID-19 and the business environment. These deferrals have resulted in an updated capital outlook of $1.1 billion to $1.2 billion for 2020, a $500 million (30 percent) reduction compared to original guidance of $1.6 billion to $1.7 billion.
In addition to this reduction in capital spending, Imperial has identified opportunities to reduce operating expenses by $500 million compared to 2019 levels. As part of this exercise, the company has identified opportunities that drive efficiency, effectiveness and a degree of pacing due to COVID-19 impacts while ensuring ongoing safe and reliable operations.
As Imperial continues to assess the impact of COVID-19, scope reductions have been identified for the planned second-quarter turnaround at our Sarnia facility, and a planned coker turnaround at Syncrude has been deferred until the third quarter. The company continues to assess other turnaround activity across the business. More broadly, the impact of COVID-19 and the current business environment on demand is expected to result in negative impacts on Imperial’s Upstream production, and Downstream refinery utilization and product sales over the near term. While the magnitude of these impacts is uncertain, our scenario planning approach is ensuring we are prepared and positioned to respond to a broad range of potential outcomes.
Petroleo Brasileiro SA Petrobras Conference Transcript (3/26)
Answer – Carla Dodsworth Albano Miller: Thank you, Roberto. The first question that we received comes from Rodolfo De Angele from JPMorgan.
It's about new production curve. So with the lower CapEx for 2020, how do you expect to see production curves in 2020 and in the following years, 2021 to 2024? Capo?
Answer – Carlos Alberto Pereira de Oliveira: Rodolfo, about this question, what I can tell you is I think that's too soon to talk about what is going to be the production curves because we are really living the effects of the COVID-29 (sic) [COVID-19] and also the effect of the reduction on demand and prices. And so what we are seeing is that we need some more time to stabilize the whole process and see what's going to happen in the future.
If we have the same situation that we are living today, and in fact, what we see is that every day is a new day, every day, the world changes completely. But if things stay in the same, I should say, the same level of the effect of the COVID-29 -- COVID-19 and also about the lack of demand and price, maybe we could -- I think that I can tell you that the figure for 2020, we don't have a new target for this right now. So if things continue like that, maybe it's a possibility that we could reach this figure considering the 2.7%, plus or minus 2.5%. But it's too soon, I think that we should wait a little bit more to see what are going to be the effects, the real effects. And because everything is changing every day, so it's too soon to tell you about what is the impact on the curve, the production curve for the -- even for the year 2020.
Answer – Carla Dodsworth Albano Miller: Thank you, Capo. The second question from Rodolfo, it's for Anelise. It's regarding refining. So do you plan to shut down refineries as well or to lower operating rates? Are there maintenance shutdowns that will be done earlier than originally planned?
Answer – Anelise Quintão Lara: Rodolfo, in fact, what we see, we saw these last days and weeks is that our refining operating rate is around 74%. If you consider the average of 2019, was 79%. We have already a reduction in our refining operated -- operating rates nowadays. But we foresee a reduction in the demand of oil products. And probably, we'll have some reduction in this operating rate for April and May, especially these next 2 months. But nowadays, as I said, it's around 74%.
We are, in fact, postponing our maintenance shutdowns because we don't want to have many people together in the refinery. We want to reduce the number of employees working during this crisis in order to avoid contamination and the effects of the coronavirus. So with the maintenance, we have lots of people working in the -- inside refinery and this is not good for the moment. So we are postponing some of this maintenance. And this is alongside, I would say, together with the evaluation of the market conditions in terms of oil products demand.
Woodside Petroleum Ltd Conference Transcript (3/26)
Question – James Byrne: Got it. Okay. On your outlook for LNG. I cast my mind back to your 2018 investor briefing day. You had a chart there on the demand forecast by region and by far and away, the largest region there was other Asia. The -- all of the small, emerging markets, ex China, that are small in isolation but large in aggregate. I'm wondering if you think that there is any permanent demand destruction as a result of coronavirus, either from much higher U.S. dollar funding costs to build the new infrastructure or perhaps lower cost of fuel oil in generation that may further implicate your ability to market volume in the medium term, noting you mentioned on the supplier side Qatar and potentially Novatek placing volume in the short term?
Answer – Peter John Coleman: Look, that's a difficult one to answer sitting here at the end of March, to be quite frank with you. Obviously, it's a question we've got to look at as we go through the year. We -- with respect to the demand, we've got to be a term optimist. We think the fundamentals on the demand is still there. And so we're not predicting permanent demand disruption at the moment. In fact, as you know, low prices often trigger even more demand.
Now there's obviously some issues in the market. At the moment, India has closed its ports, so that's creating some disruption there, but we expect that will come back quickly. The U.S. dollar -- the U.S. will work very, very hard to drive down the U.S. dollar. The Fed will do that. The Fed's already said it's going to do that. The U.S. doesn't want a strong U.S. dollar. It benefits obviously during crisis but when things get back to normal, the strong U.S. dollar is not good for the U.S. with respect to its own trade balances.
So I expect through whatever mechanism, quantitative easing, probably the most likely one because it's only lever that they have at the moment is that the Fed's going to try really, really hard to get that U.S. dollar down. So I don't see that we (inaudible) strengthening being in the marketplace. So look, it's going to come back. It'll be in fits and starts, we're just not sure where that's going.
On fuel oil and so forth, all I would say is climate change is not going away. It's real. And so substitution of other fossil fuels into the energy mix, I think it's just unsustainable no matter what the pricing point is. There might be some short-term switching, but certainly not long-term structural build out in that area.
And I can assure you, as we've been talking to investors recently, the ESG guys haven't forgot about the long term. So this short-term perturbation in the market that we're all dealing with, those responsible, from an ESG point of view, are still very much focused on the long-term resilience of business. So that it's really hard (inaudible) was just a bit foggy for me at the moment, to be quite frank.
PetroChina Co Ltd Full Year Earnings Call (3/26)
In face of the low oil price challenge, coupled with COVID-19, we are carrying out quality and efficiency enhancement across the board. Dealing with market fluctuation head on, we optimize production and operation, adjust production capacity building pace, optimize resources allocation and product mix, make more efforts in marketing, improve internal management and strictly control costs and expenditure. We will pay high attention to the changes in the capital market, intensify corporate value management, enhance corporate growth potential and value-creation capability and bring bigger value for our shareholders.
Magellan Midstream Partners LP Conference Transcript (3/26)
So with that in mind, I'll start just first of all on Page 4, with regards just a couple updates on our response to COVID-19. First of all, all of our facilities are fully operational at this time. We, a couple of weeks ago, quickly implemented a centralized organizational response team that's really focused on managing any operational or personnel issues we may have from a central location. So that is going well. The vast majority of our office personnel are now working from home effectively, and obviously, that's going to continue for a little while. We have quarantined all employees that have been potentially exposed for 14 days, or will, if they're exposed in the future. And we're in the tail end of the process of that on a number of employees, but that's been going well. We've implemented separation plans and health checks for our operations control room. We are now operating on 2 separate control rooms just from a safety standpoint, and also to give us redundancy if, for some reason, we need to close one control room, we've got a second off-site control room that's active. So that's in place today. Also at our critical facilities, our hub facilities, we've implemented health checks for employees arriving to work just as a further verification that we are keeping our employees safe and not exposed. And we have done quite a bit of work on contingency plans in case we do have a personnel issue, and that's similar to what we do for strike contingency planning. So all of those are in place and, as of today, functioning very well.
CNOOC LTD Earnings Call Transcript (3/25)
Last but not least, we would like to discuss how do we respond to future challenges. At the beginning of 2020, the COVID-19 and the sharp decrease of oil prices have brought challenges to company's operations. We will closely monitor the trend of international crude oil market and changes in macroeconomic environment, conduct in-depth research, timely formulate and take countermeasures and to strive to minimize the effect of those events. To respond to the challenge, we were focused on high-quality development, pursue profitable reserves and production, control the investment pace, adhere to most stringent cost control and maintain healthy cash flow.
Williams Companies Inc Conference Transcript (3/25)
Answer – Gabriel Philip Moreen: And then also, I'm wondering if you're starting to hearing from any of your contracting crews on your projects about working limitations in terms of needing to space out crews. Is that something you're anticipating it might have an impact on how that length might be managed?
Answer – Micheal G. Dunn: Yes, this is Micheal. We've been pretty proactive with our contractors. And the nature of the pipeline business is such that they are pretty spread out, anyway. And so -- but we're making sure that, like our large gatherings in the morning don't occur, where they would typically have a safety discussion. They're doing that remotely and with distance, and so we're making sure that we're following all the proper guidelines from a distancing standpoint. Our contractors are putting in and have already put in separate trailers, separate facilities for their crews, and segregating the crews even amongst our facility sites where they're working, and so that they're not working in large groups and not interacting as much with our operations teams, especially where we're working real hard to keep our operations team segregated from contractors coming into the facilities. And we're doing a really good job with that. We've segregated, on the operations side, our control room, and we have multiple desks in -- within certain control rooms, and we've segregated those desks out so our controllers are not working in the same rooms with each other as well. And just really dispersing our employees across the footprint so that we can maintain the continuity of operations. But so far, we've seen nothing from our contractors that indicates that they're slowing down work in regard to the coronavirus situation.
Chevron Corporation 8K (3/24)
Future Financial and Operating Results
Recent decreases in commodity prices, as a result of COVID-19 impacts on reduced demand and geopolitical pressures increasing supply, are expected to negatively impact the company’s future financial and operating results. Due to the rapidly changing environment, there continues to be uncertainty and unpredictability around the impact on our results, which could be material. We expect to provide further updates in the company's first quarter 2020 earnings press release, earnings call, and Form 10-Q.
Phillips 66 Business Update Call (3/24)
Answer – Matthew Robert Lovseth Blair: Got it. Okay. And then any comments on the export market for products? Are you able to shift barrels out of the U.S. and over to Latin America at attractive rates?
Answer – Greg C. Garland: So we continue to ship products out of the U.S. Latin America has been the biggest thing for products for the U.S. for a long time now. As I mentioned earlier, though, we're getting questions from our Latin American customers asking us, can we back off on some of the term deals that they have or some term purchase that they have from us. So you can start seeing that the coronavirus is moving in that direction. And there, they have the same concerns we do about lower demand and too much product. So more to come, we'll see how the coronavirus affects Latin America over the next few weeks.
Petroleo Brasileiro SA - Petrobas 6K (3/20)
Petrobras on sale of refineries
Rio de Janeiro, March 20, 2020 – Petróleo Brasileiro S.A. – Petrobras, following up on the releases dated November 22, 2019, December 20, 2019, and January 31, 2020, informs that, due to the prevention measures to the coronavirus, it will postpone the receipt of binding offers in the processes of divestment in downstream and its respective logistic assets, in order to ensure the effective performance of due diligence by potential buyers.
The processes include the refineries Abreu e Lima (RNEST) in Pernambuco, Landulpho Alves (RLAM) in Bahia, Presidente Getúlio Vargas (REPAR) and the Shale Industrialization Unit (SIX) in Paraná, Alberto Pasqualini (REFAP) in Rio Grande do Sul, Gabriel Passos Refinery (REGAP) in Minas Gerais, Isaac Sabbá Refinery (REMAN) in Amazonas, Lubrificantes e Derivados de Petróleo do Nordeste (LUBNOR) in Ceará.
Petrobras reinforces its commitment to the project to sell the downstream assets and their respective logistic assets, as specified in its 2020-2024 Strategic Plan.
This transaction is in line with the company’s portfolio optimization and improvement of capital allocation, aiming at creating value for our shareholders.
Imperial 8K (3/19)
Over its long history, Imperial has faced numerous periods of low global crude oil prices. In the current challenging market environment caused by the COVID-19 pandemic and commodity price decreases, the company continues to demonstrate its long-standing commitment to financial strength, capital and operating expense discipline and maximizing long-term shareholder value.
Imperial is currently in a low capital investment period; however, the company is currently reviewing spending plans in an effort to identify further efficiency opportunities.
We are naturally at a lower spending period in the cycle, with the majority of our capital being focused on maintaining safe, reliable and productive operations, said Brad Corson, chairman, president and chief executive officer of Imperial. We will continue to closely monitor and have flexibility in our plans to respond to market conditions, and rigorously examine operating costs and capital investments to maximize long term shareholder value in whatever business environment we operate.
Imperial is taking proactive and preventative measures to protect the health and safety of our workforce and do its part to limit the spread of the novel coronavirus in the community. The company is monitoring the situation closely and has implemented comprehensive plans across its operations.
We remain focused on maintaining safe and reliable operations and on the health and wellbeing of our employees and their families, business partners and local communities during this difficult time. We are committed to doing our part to reduce the impact of COVID-19 in our communities, said Corson.
ConocoPhillips Conference Transcript (3/18)
Answer – Muhammed Ghulam: So given your status as a global player in the oil markets, have you guys seen coronavirus impact demand for your customer specifically? Can you provide any insight into where you've seen the greatest impacts?
Answer – Ryan Lance: The greatest impacts on -- did you say on customers, Muhammed?
Answer – Muhammed Ghulam: Yes. Have you guys been -- have your customers been -- have there been any impact delivering crude or them being able to take the crude, given how much demand has fallen in some regions?
Answer – Ryan Lance: Okay. Thank you. I'll -- Don can handle that. He runs our commercial organization.
Answer – Don Wallette: Yes. So far, we haven't seen any impacts on the marketing side. We've got LNG sales into Japan and China, and we haven't had any force majeure notices or request to reduce deliveries yet.
Saudi Aramco Earnings Call (3/16)
I would now like to discuss our future capital spending plans, which demonstrate both our discipline and flexibility. With our strong financial framework and a disciplined CapEx governance process, we are able to successfully invest to meet the vision and strategies that Amin described earlier. We have launched dynamic CapEx review in response to prevailing market conditions. As you may remember, at the time of the IPO, we indicated that our expected 2020 organic CapEx to be in the $35 billion to $40 billion range. We have now optimized our spending plan, and I can today confirm that our 2020 organic CapEx is expected to be in the $25 billion to $30 billion range. As yet, no one knows the precise impact on economic activity and energy demand from the coronavirus outbreak, especially in the longer term, and additional efficiencies may be required. Our CapEx budget for 2021 and beyond are therefore currently under review. Furthermore, for the longer term, we are examining plans to increase our maximum sustainable capacity to 13 million barrels per day. It is worth highlighting that our low-cost structure is a great advantage in facing the current challenge. Our upstream lifting cost in 2019 was only $2.8 per BOE produced. And our upstream capital expenditures only $4.7 per BOE produced, both being the lowest in the industry. Given our low-cost, our flexibility and our low sustaining Capex, the company can sustain a low breakeven oil price.
Weatherford International PLC Earnings Call (3/16)
Now let me discuss the year ahead. The industry was challenged throughout 2019. And clearly, 2020 will be even tougher. The impact of a weakening demand environment for hydrocarbons due to the COVID-19 pandemic has been exacerbated by plants from OPEC members and their partners to introduce significant additional supply into the market. As a result, our North American customers have recently made deeper reductions to their capital spending, resulting in weaker demand for oilfield products and services.
Moreover, there are risks associated with potential operation and supply chain disruption, travel restrictions, government enacted measures that may negatively impact our ability to operate. We have developed plans to mitigate any disruptions, and we continue to closely monitor the situation and will adjust as required. Given these developments, we are retracting the guidance of the company prepared in September of 2019 for the full year 2020 and onwards.
CMS Energy Corp Form 8-K (3/16)
The Coronavirus Disease 2019 (“Covid-19”) is currently impacting countries, communities, supply chains and markets. To date, Covid-19 has not had a material impact on CMS Energy nor Consumers. However, CMS Energy and Consumers cannot predict whether Covid-19 will have a material impact on CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations.
Neste Corporation Analyst/Investor Transcript (3/12)
Well, let me then move to our focus areas in 2020. And I think it's very important to note that the demand for waste and residue has been growing. We are looking at a tightening market in 2019. So the efforts in this area are a very important driver for our competitiveness. If I first reflect a little bit on what has happened in the market, already in early 2019, we started observing a trend where the prices for both animal fats, used cooking oil, went on an increasing trend. In the second half of the year, also, for example, palm oil clearly showed an increasing trend. If I now look at what has happened in 2020, I can see that the increasing trend has clearly continued for waste and residues such as animal fats and used cooking oils. For palm oil, in the very recent history, we have seen a clear decrease, which follows from the overall situation around the macro -- the coronavirus. So in the last 2 months, we have seen actually a 25% drop for palm oil. But still, we see a tight market for animal fat and used cooking oil. So that underlines that our efforts in this area continue to be extremely important.
So what are the most important areas in 2020? First of all, it's continued organic growth in existing markets. So we continue looking at opening new terminals, making our supply chain more efficient. And examples would be, for example, China or the United States. Another area is, again, geographic expansion. We do see opportunities in areas such as South America and also Eastern Europe, where we intend to go closer to our partners. And finally, we keep working on M&A opportunities to strengthen our strategic positioning in the most important supply chains. And here, I'm pleased to give you an example. We were just able this week to announce that we have acquired a used cooking oil collector in the United States called Mahoney Environmental. And I would be happy to give you some background on this acquisition as it's a great example of that work we are doing on the acquisition side.
OMV AG M&A Special Transcript (3/12)
Answer – Thomas Yoichi Adolff: A few questions please. Just kind of looking at 2020 and maybe you can provide some guidance in terms of profitability, et cetera. I mean, when we look at Shell and Exxon's chemical earnings in the fourth quarter, they were both loss-making. So perhaps you can comment about your expectations for 2020 and then how that compares to 2019 as it relates to the Borealis business.
And then just secondly, just going back to your prior comments on M&A. You said M&A is pretty much done and dusted. We know we're confident about the outlook to 2025, et cetera. And how -- this deal came kind of out of the blue. So perhaps you can talk about how this deal came about. And also what it means for your plans as it relates to Indonesia. You're looking at building a chemical plant in Indonesia.
Answer – Rainer Seele: All right. Thomas, 2020 guidance is a little bit difficult. Everybody is looking into this crystal ball, talking about a virus infection, playing the psychology in the trading markets. So that's a little bit difficult to give you a clear guidance for the full year in comparison to 2019 because the environment in 2019 was a little bit different. But I would like to give you a little bit of an idea what we do see right now in the market and how we started into the year. Well, if you look into the market, definitely the oil and gas prices are going to challenge our Upstream business in 2020. If I look what has been reported in the newspaper so far, I don't see a quick change of this trend. So that the oil and gas prices will go up quickly. But there are some scenarios which would tell me also an upside in Upstream. I don't want to exclude this, but I think Upstream business in 2020 will be more a challenging year than one of these most prosperous years we have in our history. In terms of the Downstream business, the picture looks different. The picture looks very positive as we speak about our petchem business in Europe. We have seen as a reaction of the lower feedstock prices, especially the lower naphtha prices. We have seen now, in these days, very high petchem margins in the markets over here in Europe. The Asian markets, a bit more challenging as the corona is more playing down China, but we see first signs of a slow recovery, especially in China.
When it comes to the refining margins, I just would like to ask you to look into the refining margins development. We are enjoying now a real good refining margin in fire environment in Europe as well as also in Asia. So the only product to make that story not too positive, the product which is really a challenge, is jet in these days. You see that not only the airline industry is struggling, the refineries as well. So in 2020, the picture is, as we speak about the first months, and as we speak about the current development, it's a mixed one. It's a challenge for Upstream and it's a positive development so far in Downstream, especially, we do see a good business in petrochemicals in these days. It may have to do with our strong presence, we do have in Europe that other competitors might tell you a different story. When it comes to Indonesia, a clear message. This project has a big question mark in our discussion in our Board at the moment.
Empresas Copec SA Earnings Call (3/12)
Similar situation for Argentina, still some volatility there. We are seeing a good outlook in general for panels, not so much for sawn timber. Volatility in political terms also in terms of exchange rates, and that could affect our margins, again, when measured in U.S. dollars.
In Chile, we had a first few months of good sales in general. We are still, of course, subject to the uncertainties that we have during the social situation in Chile. But so far, during the first month, we've seen good sales.
Asia is basically affected by the uncertainty related to the coronavirus. However, we are seeing some signs of increased demand for lumber in some markets. And in Europe, some initial positive signals related to prices basically, but once again, subject to how the coronavirus unfolds.
Same thing in the Middle East, signs of stability and in general, good signals, but in this particular area, of course, subject to the development of the virus and those of the oil market.
Moving on to the fuel division, which we are detailing as from Page 21. We're taking a look here at Copec in consolidated terms, so it includes Copec, Terpel and Mapco essentially. You can see here that the EBITDA in local currency went up by 10%, which is a very good figure for the quarter. Accumulated is 80.4% for the year. So EBITDA measured in local currency is 8.4% up for the year as a whole. So all in all, a good year for our fuel division when measured in local currencies.
Lukoil 2019 Full Year Earnings Presentation (3/11/20)
Question – Ildar Davletshin: I have a couple of those. And let me ask those upfront. My first question relates to your -- or the OPEC+ deal, which failed to be extended. What's your attitude to that as a private company, given that some of the members of OPEC, say, Saudi Arabia, for once, have decided to increase their production output, would you have to follow suit as well should all the industry in Russia decide to hike production? Or would you have flexibility in your strategy? My second question relates to your share buyback program. You mentioned $3 billion in total. Would that cover up to 2022? And whether you're going to provide any more insight to that?
Answer – Vagit Usufovich Alekperov: My first answer is on the OPEC+ transaction. Mr. Alekperov speaking. Myself and LUKOIL stood for the deal to be extended, but decisions are made at the very senior level. Tomorrow, I'm going to participate in a meeting with a minister, and I'm going to deliver our opinion. I'm convinced that in an environment like today with the coronavirus present and problems in the -- with Chinese economy, the oil-producing countries must coordinate their efforts. So hopefully, on March 15, the OPEC committee is going to meet and find a mutually acceptable solution that would enable stabilizing the prices and the whole market.
As far as your second question on buying back is concerned, we are not entitled to comment on that. So at this point, I wouldn't dwell in detail upon the future transactions.
Exxon Mobil Corp at Investor Day (3/5/20)
You all know, today, oversupply is driven by industry investments and some of these growth markets have exceeded demand, and we've got a very challenging short-term margin environment, which is now being compounded by the growing economic impact to the coronavirus that we're seeing around the world. And that is creating a lot of uncertainty, particularly in the near term, and I would say, particularly here in Wall Street. However, the longer-term horizon is clear. And today, our focus is on that horizon and the future. And I'm providing all of you an update on the progress we've made on our long-term plans to structurally grow our earnings and cash flow while improving returns.
Kinder Morgan Inc at Credit Suisse Summit (3/4/20)
Question – Spiro Michael Dounis: Yes. So thanks, Dax. So I'll kick it off here. Just thinking about the landscape and really what's changed, it feels like forever since your Analyst Day at this point. I can't believe it's only been a little over a month. And of course, lot's changed since then. So just wondering if you can give us a sense if you guys have already started to augment your strategy before, as you said after the year? And if you've seen any sort of demand or supply responses so far to kind of what's been happening vis-à-vis coronavirus and just the market [sell-off]?
Answer – Dax A. Sanders: Yes, that's a good question. I mean, obviously, it's incredibly early. I mean we're sort of a week into -- kind of 1.5 week half into the macro response on -- from a coronavirus perspective. I mean, in terms of like real-time bleeding stuff, we haven't yet. In terms of -- we're obviously -- we, in large part, are a service provider to our customers, be they existing customers, be they future customers for anchoring additional capacity and we're in constant contact with them.
Obviously, the broader equity -- the broader risk markets have been volatile and energy markets within the broader risk markets have been especially volatile, even more volatile, which there's no doubt, I'm sure our customers and people are looking at. And so that certainly could affect conversations. But just to reiterate, so many of the customers we have, which I talked about earlier, are demand pull, they're LDCs, they are people that are ultimate consumers and users of gas. They're tied to people heating their homes, people using power, things like that. And so in terms of what we do on an everyday daily basis, we haven't changed much. But you're right, it seems like an eternity since the Analyst Day.
Chevron Corp Security Analyst Meeting (3/3/20)
Moving to the macro. First, let me address the short-term impacts of the coronavirus. No doubt, demand for our products is down. Our focus is on protecting our people and maintaining safe operations. This time, our operations and supply chains are functioning normally. We're taking all appropriate precautions to keep it this way, but it's a fast-changing situation.
Moving to the long term, the demand outlook for our core commodities remain strong. Over the next 20 years, the world's population is expected to grow from 7.8 million (sic) [7.8 billion] people to more than 9 billion. The world will continue to need more energy to support a growing population and an improving quality of life.
The chart on the left shows IEA's stated policy scenario, an independent view of demand that accounts for known and expected changes in both policy and technology. Total energy demand is projected to grow by nearly 25%, and oil and gas by a similar amount, representing roughly the same share of the total energy mix in 2040 as it does today. Even in IEA's sustainable development scenario, which is Paris-aligned, oil and gas is still expected to be about half of total energy demand. And as you see on the right, the underlying decline in supply requires significant investment to replace 80% of production from existing fields by 2040 and also meet the growing demand for liquids. Any way you look at it, the world will need more of what we produce, not less.
Valero Energy Corp at Credit Suisse Energy Summit (3/2/20)
Answer – Joseph W. Gorder: Yes. I mean it's interesting. So -- I'd give you some background. I've heard that Dr. Fauci -- I was at a business council meeting a week ago in D.C., and he got up and spoke. What we're dealing with is a kind of a strain of flu, right, with the coronavirus. It's spreading. It's gotten hyped. We were talking about in the airplane, do you think it would have been this hyped if we weren't in an election cycle with a strong economy and somebody trying to make this an issue, right? So who knows? But based on what I see, if the treatment right now is wash your hands with soap and water, try to stay healthy, and I heard on the news a guy's treatment for -- is coronavirus was Gatorade for 3 days, and he was okay. I mean this is one of those things that, could it be serious? I guess it could. It's more the Chinese impact than anything. We're all trying to figure out, is the data we're getting out of China good and real? Is it going to last a long time? Is it going to force their economy to screech to a halt?
The U.S. economy right now is strong. And as Lane mentioned, we're really not seeing any big impact on demand for our products. And the products that were -- except for jet.
Answer – R. Lane Riggs: Except for jet.
Answer – Joseph W. Gorder: And the products that we're moving into Mexico, there doesn't seem to be any impact there and so on. So I wouldn't anticipate that we're going to see a recession.
The question is how long does this last. And seasonally, does it phase out? And that's why, frankly, we are looking at this as an opportunity, okay? This whole market sold off. I mean personally, I'm looking at this as an opportunity. What should I be buying out there because people have gotten beaten down. And Valero is no different this week than we were 2 weeks ago. Our operation is absolutely no different. And we have the same people in place, and they're running the business, and we're making money. And so anyway, it's a -- one of these deals, it's a little bit like we had at the end of '18 when we had the IMO hype and then it just started selling off so hard. You'd love to be able to come out and say something. I'd love to come out and say, you guys, don't worry about this, it's not an issue, everything is going to be okay. And I guess that's kind of what I'm doing. But I'm not a doc, and so I can't speak to it directly. But I think it's -- my guess is this is going to be short lived, it's overhyped, sure. Might I get coronavirus? Could well happen. Is it going to kill me? Well, history with -- that we've seen so far with this virus would say, no, it's not. So anyway, I hope next year, you're sitting in that same chair, and I hope I'm here to say we are right again, okay?
Occidental Petroleum Inc. (2/28/20)
Question – Paul Benedict Sankey: Understood. And just to be clear, could you talk a bit more about your flexibility to cut? I mean, at the moment, you're growing, obviously, you could conceivably go growth flat or growth negative. And if you could just talk about some of your flexibility because it is important for people.
Secondly and finally, could you just reiterate on the divestment program, because I think that's the other very important thing to people? Obviously, you've gone through it line-by-line. But to be clear, you're reiterating that by midyear, you will have done the $15 billion. Is that what I've read or already said, sorry, then seen re-reported online?
Answer – Vicki A. Hollub: I'll address the dividend first, and you're right. We have built a scenario around currently -- certainly, the environment we're in. We don't know how long the -- this coronavirus impact will last. So what we've done is we've actually initiated our business continuity plans. And we started to look at various scenarios and what we would do in a situation where this looks to be lower for longer. So we have the flexibility to first lower our growth to no growth. Beyond that, we have the flexibility to go even lower than that and still maintain our production.
So -- and beyond that, we -- I think we've said in the past that because of the high-growth assets that we have, we could actually allow our production to decline a little bit. If we're in a scenario where the lower prices are being driven by an event, and this is that case. Because remember now, prices were $55 or above before the coronavirus hit. So we believe that this is not a scenario that's going to last for so long that it would put us in a scenario that we can't deal with it -- with the situation that we have. So we've got those scenarios built in, and we've got timelines on when we would make decisions and pull triggers. So we're well prepared to address this.
EOG Resources Inc. Earnings Call (2/28/20)
Question – Arun Jayaram: Yes, Bill, I was wondering if you could comment on how EOG is thinking about some of the demand impacts from the Coronavirus and the state of the oil market today? And what would be the company's game plan if we did move into an environment where we have sustained oil price that caught in the low 40s for some bit of time?
Answer – William R. Thomas: Yes, Arun, certainly, this is a huge world event, and it's developing. And we like everybody else is watching really daily the developments around the world, and we certainly hope and pray it's a short-term event. But if it turned to a longer-term event, as Billy said, we're in a fantastic position. Number 1, we got a great balance sheet, and we are committed to that, and that's certainly been a strength of EOG for years and years and years. And so that puts us in a great position. And then we're very flexible. We have an operational ability to adjust activity. And I think I'll let Billy comment a little bit more about that, maybe some of the specifics.
Answer – Lloyd W. Helms: Yes, Arun. So the way I would add to that is we have the capability to adjust our rig activity and frac fleets down to really be in line with our sustainable CapEx or smart maintenance capital numbers. So we've set out a plan that really allows us to capture the highest performing rigs and frac crews in the market, but we have a tremendous amount of flexibility to adjust downward if we need to and so -- and the same would apply to our allocation of capital to our infrastructure spend and other things. We have the same capability to adjust that downward if needed. So we'll just be patient here and watch to see how the market unfolds and adjust accordingly.
Husky Energy Inc. Earnings Call (2/27/20)
Question – Benny Wong: Great. And just my final question, and it's related really to Jeff's prepared remarks. I think you mentioned you guys are looking at opportunities to further reduce capital. Just wondering if you're able to provide some kind of early sense of what you're looking at and sense of magnitude that we should be thinking about.
Answer – Robert J. Peabody: I'll let Jeff, if he wants to add in a second. But let me just give you the kind of overall context. First, just, clearly, when we put out our guidance at the end of last year, we did actually reduce our CapEx guidance relative to what we had said we were going to do at the Investor Day earlier in that year. We took $100 million out of 2020 and $400 million out for next year, and kind of again indicating that we would expect that the run rate capital level will drop on a more sustaining basis beyond 2021. And so we've already baked that into the plan.
We are, of course, and I'm sure most of our colleague firms out there will be looking at capital programs again, given what we're seeing with oil prices and margins, given the virus outbreak and all these things going on. So what I assure you is we've done enough to understand we do have more capital flexibility. There is more room that we can reduce CapEx this year. We haven't finalized those plans. But our finger's over the trigger, I guess you could say, if they're required.
Continental Resources Inc. Earnings Call (2/27/20)
In 2020, we plan to take the stewardship of our shareholders' assets to the next level through continued capital discipline and operational excellence. In this current price environment, we are moderating our near-term growth and keeping capital spend flat year-over-year. We see the oil and gas market as fundamentally oversupplied, with demand even further impacted by the coronavirus. By preserving our high-quality asset for a more structurally sound market, we are further enhancing future value for shareholders.
Continental Resources Inc. Earnings Call (2/27/20)
Question – Neal David Dingmann: That was my follow-up, Harold. Just overall, could you talk just a little on macro, your thoughts for the remainder of the year. If -- I'm just kind of curious if you think that we're going to be -- continue to oversupply. And obviously, prices are going to impact like they are because of that. Do you see any reason to build DUCs or do anything like -- as such that you all have in the past?
Answer – Harold G. Hamm: No, we don't see any reason to build DUCs. We can answer that quickly. Let's back up just a little bit. Before this coronavirus came about, we saw the market correcting very, very quickly as far as balance of supply and demand. Obviously, this is going to take something away from demand. We'll have to see how broad that is given a few weeks here, but it just means cut back a little bit and wait and see how that plays out. Hopefully, it won't get any worse than anybody expects, but who knows at this point? So overall, we see the market strengthening. Certainly, this is a reaction to what we're seeing around the world right now.
TechnipFMC PLC Company Presentation (2/27/20)
TechnipFMC PLC Earnings Call (2/27/20)
ld provide a bit of color on the operating cash flow guidance? I recognize some of that may be partly driven by cash advances that you might expect from clients, but I was just wondering if there's also any underlying improvement that you're seeing on your own working capital dynamics?
And then the second question I had is, on the back of what we're seeing on the coronavirus, is there anything -- I know you are working with certain Chinese errands. Is there any delays or any concerns at this point in time?
Answer – Douglas J. Pferdehirt: Okay. Sure. So thank you, Lillian. I'm going to make a comment around the coronavirus, and then I'm going to pass it to Catherine MacGregor who's with me and as you know, is the CEO-elect, for Technip Energies and has been very involved and is currently the president of the GBU for Onshore/Offshore and is very involved in those projects. So I'll let her add some additional color. And then Maryann will add some additional color around the cash flow comment that you made, which I appreciate you pointing it out. We're very proud of the progress that we've made, the continued progress that we've made and a good progression and just remind you that we are a business of projects, and there will always be new projects coming in and projects closing out, and we are very pleased with the trend of our cash flow and the projections that we were able to share for 2020.
Just in terms of the coronavirus, look, first and foremost, we are deeply concerned for those who have been impacted. We are very much monitoring the situation and have put in place the appropriate actions to try to ensure the health and well-being of all the 37,000 women and men of our company and the many, many more contractors that we work with in the various sites and the various projects around the world. I'll let Catherine, again, put some additional color around maybe an example or two of what's actually happening on the projects.
Answer – Catherine MacGregor: Yes. Thank you. And indeed, we are, in light of the context of the coronavirus, working very actively, and I would say, collaboratively as well with our customers, but also with our subcontractors and with our partners to make sure that we take appropriate measures to really mitigate the impact on our projects. So what we've said is that the guidance that we gave you on Onshore/Offshore reflects what we see today as the impact of the coronavirus. So to give you a little bit of example of some of the things we're doing, again, working very collaboratively with our customers and with our suppliers in one of our projects, for example, we were able to transfer some engineering hours from one of our Chinese-based subcontractor to one of our operating centers.
In another project, some orders were placed or were diverted from a Chinese supplier to European-based supplier. And we have a number of actions like this that we are able to take again working as proactively as possible with our partners, suppliers and customers.
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