4 ways the O&G sector continues to face protracted soft conditions: Phillip

SINGAPORE (Apr 16): Phillip Capital is of the view that Singapore’s oil and gas (O&G) sector is facing an extended period of soft conditions.

To begin with, banks have now become the de facto owners of vessels, rigs and other facilities taken over from loan defaulters, and are now facing difficulty in disposing of such assets, in the research house’s view.  

“Such assets operate under minimal positive cash flows and managed by either third party operators hired by banks/creditors or the original owners. Assets that should have been scrapped remain operational and have prolonged the supply imbalance, in our opinion,” notes analyst Chen Guangzhi in a sector report on Monday.

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