When we think of oil companies today, many times we think of huge, looming, ever-profitable companies that are wreaking havoc on the environment. But Brazilian oil and gas company OGX Petroleo e Gas company isn’t as big or as powerful as it once was; in fact, it’s currently in the midst of a crisis that could completely collapse the company.
In July, Reuters reported that OGX shares had fallen by 39 percent, trading for less than 3 percent of their all-time high. The company, which was once Brazil’s second-largest oil company, is now struggling to just stay afloat.
“We are now at a new level, one of survival rather than growth,” said Luiz Caetano to invetsors on Monday, July 1st.
As part of that survival strategy, OGX has now hired on U.S. financial advisory firm Lazard to help with debt restructuring. Blackstone Group has also been brought in to give financial advice throughout the restructuring process. The two companies will work alongside each other as OGX tries to find a way to stay alive.
A major part of the problem for the oil company has been that its only producing oil field, Tubarão Azul, has had an output far below what was expected. OGX has discovered some other potential offshore sites but is so strapped for cash that it may not be able to even finance their exploration.
Aside from the myriad other problems that result from drilling oil, their volatile nature is just one more reason that we need sustainable energy sources. Not only is oil non-renewable, but there is no guarantee that discovered sites will even produce the amount we expect them to. Reducing, and eventually eliminating our dependence on oil will not only be good for the environment, but it will also provide a more reliable source of energy.
The sun and wind aren’t going anywhere anytime soon, but we’ll soon reach the bottom of the oil wells. And then what? We’ve spent a lot of time ignoring the consequences of our actions; it’s time we stopped and smelled the roses.