Energy experts are urging global oil companies to sharpen operational efficiency as a pathway to restoring profitability, following a series of financial setbacks in the industry.
The call comes in the wake of Tullow Oil Plc’s announcement of a $61 million post-tax loss for the first half of 2025, a sharp reversal from the $196 million profit recorded during the same period last year.
In an interview with Benjamin Nsiah, Executive Director of the Centre for Environmental Management and Sustainable Energy, said Tullow and other oil producers must focus on boosting production levels to offset stagnant oil prices.
“National and international oil companies must improve operations and increase output to remain profitable, especially since oil prices are unlikely to rise much higher than current levels,” Nsiah cautioned.
“If prices stay flat and production remains constant, revenues will decline. Continued losses could eventually force some companies into liquidation.”
Tullow’s latest financial statement showed its net debt at $1.6 billion as of June 30, 2025, slightly lower than the $1.7 billion reported a year earlier.
Cash gearing stood at 1.9 times net debt to EBITDAX or 2.1 times excluding Gabon, compared to 2.3 times at the end of 2024.
Further, liquidity headroom, however, narrowed sharply to $0.2 billion from $0.7 billion in the same period last year.
Interim CEO and Chief Financial Officer Richard Miller said the company’s focus remains on four strategic pillars: refinancing its capital structure, optimising production, growing reserves, and tightening cost controls.
Nonetheless, experts say these efforts, combined with targeted efficiency improvements, could determine whether oil producers weather the current market pressures or face deeper financial strain in the months ahead.
