North Sea Oil in liquidity crisis
28th May 2016 | Commercial Energy
Colin Welsh, the Aberdeen-based head of international energy investment at Simmons and Company, said the UK and Scottish governments are not doing enough to help the North Sea Oil industry: it is slipping towards a liquidity crisis on the scale of Lehman Brothers.
Lehman Brothers filed for bankruptcy in 2008 after borrowing heavily to fund its investments: many of these were in housing which caused huge losses when the subprime mortgage crisis hit. The failure of Oil Exploration and Production companies could have a ripple effect which would take oilfield service companies over the edge.
A recent example is the closre of First Oil Expro: its bank pulled out of lending on the basis of oil reserves which made refinancing impossible. Debt management and liquidation specialists are heading to Scotland in their droves to sort out similar problems.
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