Oil Claims More Victims

Oil Claims More Victims

The collapse of oil prices has claimed its first bankruptcy victim in Norway’s offshore industry, and analysts warn more may follow.
Dolphin Group ASA, a seismic surveyor that maps the seabed for oil and gas reservoirs, became the first Oslo-listed company in the industry to file for bankruptcy Monday. One of its competitors, Polarcus Ltd., is in talks on restructuring debt—but the threat will not stop there, with insolvency cases bound to multiply among drillers as well, analysts say, Bloomberg reported.
“Drilling companies might be next in line,” said Eirik Rohmesmo, a credit analyst at Clarksons Platou Securities AS. “Drillers are now living off their existing contracts taken out at market peak, but these are running out.”
Oil producers are cutting spending globally to cope with a plunge in oil prices and investment offshore Norway will this year fall the most since 2000. There is likely to be little let up next year, with Brent crude hitting a new seven-year low Monday at $36.3 a barrel.
“There will clearly be more” bankruptcies, Lars Kirkeby, chief credit analyst at Nordea Markets in Oslo, said by phone. “There will gradually be challenges for many supply shippers and, later on, for rig companies.”

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