BHP Petroleum contractors to get reprieve

MINING and oil and gas giant BHP will offer immediately pay to all outstanding invoices and move to a seven-day payment term for the next six months, to support contractors and suppliers facing financial strain from the COVID-19 crisis and sunken oil price.
BHP Petroleum contractors to get reprieve BHP Petroleum contractors to get reprieve BHP Petroleum contractors to get reprieve BHP Petroleum contractors to get reprieve BHP Petroleum contractors to get reprieve

Paul Hunt

Senior Journalist: Energy & Commodities

Paul Hunt

 

Over the last two months the oil price has more than halved, and seen many oil and gas operators cancel or delay project expenditure, which has resulted in work for contractors quickly drying up. 

In the last month alone, Subsea 7 warned it would face "significant headwinds" and withdrew its guidance for the year, seismic surveyor Polarcus has had companies drop contracts in the Asia Pacific region, and Maersk Drilling received notices of contract terminations for its rigs. 

Across the ditch, in New Zealand, COSL's Prospector rig was laid off after OMV cancelled its offshore development campaign. 

Small and large, contractors and service providers throughout the industry have withdrawn guidance, cut capex and opex, and in many cases been forced to lay off workers. 

BHP president of petroleum operations Geraldine Slattery acknowledged the combined war on two fronts resulting from the low oil price and travel restrictions due to the coronavirus pandemic. 

"A cornerstone of the social value of our business is the continued health of the companies we count as partners and suppliers, especially during this time of great uncertainty," Slattery said. 

BHP Petroleum spends more than US$150 million each year with its suppliers and contractors across the US, Canada, Mexico and Trinidad and Tobago. 

"BHP's first priority is the safety and health of our workforce and communities.  Communities across the country rely on the critical energy resources we produce and we rely on our suppliers to continue delivering this resource," Slattery said.