The effects of the downturn on the energy & utilities industry
The recession will gradually expand into more industries in our economy, where a cutback of economic activity will no doubt reduce the demand for energy. Next year, the global demand for oil is expected to fall for the first time since 1983. A fall particularly triggered by a slowdown in growth of the emerging markets. Nevertheless in the developed countries, where the energy market may be considered saturated, basic demand for energy to keep the economy going will always be relatively high. And yet, your energy company will have to face the consequences of the recession on a number of fronts.
Bankruptcies of your commercial buyers obviously have an immediate effect on your sales. The importance of assessing “counterparty risk” when concluding and extending contracts is on the rise. The highly volatile oil prices result in fluctuations in your sales and margins, which will be reflected in your trading portfolios’ value and risk development. Depending on this development a reassessment of the risk management policy may be required. Many energy companies use joint venture structures to invest. Financing problems with joint venture partners may endanger the continuity of investments. What goes for assessing “counterparty risk” of buyers likewise goes for partners and (strategic) suppliers in investment projects.
Deloitte is the ideal partner to help you navigate the downturn. Our industry expertise will be bundled to support you with an integrated approach to gain quick insight and to help you develop and execute a focused plan. Our integrated offering focuses on optimising your business portfolio, controlling costs, mitigating risks, optimising tax and improving cash flow and funding.
- We provide you with a complete analysis that assesses improvement opportunities within 2 to 4 weeks
- We are a one-stop trusted partner that has all the expertise you need: one team, many perspectives funneled to one vision, one complete overview
- We have the power to implement what we advise
If you would like to explore how Deloitte can help you navigate the downturn, please contact:
Mobile: +31 (0)6 20 25 20 88
Assistant: +31 20 582 53 13
Stefan de Kruijf
Mobile: +31 (0)6 12 01 14 59
Assistant: +31 20 454 70 20
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