Tullow Oil slashes workforce as it reveals recent oil price rout could sink it
Tullow Oil’s future was in doubt last night it revealed that the recent oil price rout could sink it.
The energy group announced plans to slash its workforce by a third and attempt to raise £780m by selling parts of the business as it warned there was ‘material uncertainty’ about its ability to keep trading.
Tullow’s shares sank 31.3 per cent, or 5.67p, to 12.46p, and have fallen by more than 90 per cent in the past year.
Tullow Oil announced plans to slash its workforce by a third and attempt to raise £780m by selling parts of the business
The business – which was already struggling – has been pushed to the brink by a plunge in crude prices that began three weeks ago on worries about coronavirus’s effect on oil demand.
On Monday prices racked up one of the biggest one-day falls in history as Saudi Arabia ignited a price war with Russia, which could flood the global market with cheap supplies.
Yesterday, crude fell by another 6 per cent to $33 a barrel in response to President Trump’s shock travel ban that put a moratorium on all flights from Europe.
In the last three weeks Brent crude almost halved from $59 a barrel.
FTSE 250-listed Tullow swung to a loss of £1.3billion in 2019 – from a profit of £204million a year before – as it took £1.6billion of write-offs and one-off charges, in part caused by a much-lauded oil discovery in Guyana which turned out to be a dud.
The crash in oil prices also reignited a battle between Premier Oil and its largest shareholder, Asia Research and Capital Management (ARCM).
ARCM wants Premier to abandon plans to spend £660million buying energy projects in the North Sea amid the crash in oil prices.
Premier fell 45 per cent, or 10.35p, to 12.62p.