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OUT OF THE WOODS
pandemic had devastated much of the global economy,” says NuStar president/CEO Brad Barron.
USA • LOW COMMODITY PRICES AFFECTED MIDSTREAM OPERATORS IN 2020 JUST AS MUCH AS THE COVID-19 PANDEMIC, BUT OPTIMISM PREVAILS FOR 2021 WHEN THE HISTORY books write the story of 2020, it will undoubtedly be dominated by the Covid-19 pandemic. But for companies operating in the oil patch in North America, just as significant was the slump in crude oil prices early in the year, with a knock-on effect on natural gas and downstream prices and investment throughout the supply chain. The extent to which those factors affected the financial performance of midstream operators varied widely, depending on each company’s exposure to the oil sector and the extent to which they were protected by take-or-pay contracts or similar dependable
with many of them reporting sharp reductions in revenues and income. Enterprise Products Partners, for instance, reported revenues of $27.2bn for 2020, down 17 per cent on the $32.8bn recorded in 2019, with net income dropping by the same percentage to $3.89bn. Enterprise’s diversified operating base, together with a policy of strict cost control, enabled it to restrict the impact of the adverse market conditions, although it booked non-cash impairment charges of some $891m, largely relating to its natural gas pipeline operations. NuStar Energy, on the other hand, was
COMING OUT All senior executives have taken great pains to stress the importance of their workforces during the pandemic, and Barron is no exception: “I am also happy to say that despite a very difficult year for our economy, our industry and our company, our operations did not skip a beat in 2020 thanks to the dedication of our employees. We had no work-related Covid-19 transmissions and our safety and environmental record continued to be significantly better than our industry averages.” Likewise, Jim Teague, co-CEO of the general partner of Enterprise Products Partners, says: “We are extremely thankful and proud of Enterprise’s employees for their dedication and perseverance in responding to the challenges and opportunities during 2020 caused by
income streams. But all felt the pressure,
badly affected, reporting a net loss of $199.0m for the year, after non-cash impairment and operational charges amounting to nearly $400m. “As we came into 2020, we had just booked the best fourth quarter in company history and we were expecting a record year. However, by March 2020, the Covid-19
the effects of the pandemic.” As we now near the end of the first quarter of 2021, the pandemic is still with us, although there are signs that the worst might be over. “We are optimistic that the combination of the vaccines, significant government stimulus and shorter economic
CASH WAS TIGHT DURING 2020 BUT MIDSTREAM OPERATORS ARE STILL ADDING TO THEIR INFRASTRUCTURE TO KEEP HYDROCARBONS MOVING THROUGH THE CHAIN
HCB MONTHLY | MARCH 2021
