Law firm: Oil industry could face zombie phenomenon

The low oil price could end up creating zombie companies in 2016, projects US-based law firm Wilkie Farr & Gallagher, which in an interview with ShippingWatch points to several possible scenarios for the coming year.

Photo: Weatherford PR

The end of 2015 was first and foremost characterized by prices for Brent crude dropping below the magic USD 40 per barrel threshold, even reaching as low as around USD 36 per barrel ahead of Christmas. As such, it looks increasingly pertinent that more oil companies, and especially subcontractors, may be forced to shut down in the near future.

This happened for Norwegian seismic offshore unit Dolphin, which filed for bankruptcy recently. ShippingWatch has asked Graham R. Lane, who specializes in restructurings and is a partner at law firm Willkie Farr & Gallagher’s London office, to assess what is in store for the sector after six months in which things have gone from bad to worse for numerous players in the industry.

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