Due to a continuous decrease of the world oil price for the past few months, Ukrnafta PJSC is taking urgent measures to cut operational costs of the company.
At the end of last year, Ukrnafta prepared its budget for 2016 based on a number of different oil prices between $30/bbl and $45/bbl and submitted it for approval to the Supervisory Board. However, this month the world oil price has already dropped below $29 bbl, which means that the company will have to revise its budget and significantly reduce expenses.
"All the companies in our industry are aggressively cutting costs to weather the storm and make themselves stronger. We need to do the same. The Management Board is currently looking where to reduce spending on new projects. Also, we are determining the minimum program which will sustain our business. Our decision on investments will be communicated to the structural units as soon as we finalise the budget process and gain approval from our Supervisory Board." – said Mark Rollins, Ukrnafta's Executive Board Chairman, in his memo to the company's employees yesterday.
Meanwhile, the corporate finance department of Ukrnafta under the direction of the new CFO Iryna Yevets has already commenced the initiative for cost reduction.
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