Recent slump in oil prices is a very negative thing for oil producers. What should they do if low oil prices are the new norm?
1. Focus on efficiency. If company wants to focus on oil, then focus on building the most efficient systems to get that oil in to the market. Less efficient companies will eventually die out, or become purchase targets. Realistically; it is impossible to dream of massive profits, but a solid and good return will come to those who don't reach too far.
2. Sell out. You believe oil is never going to become profitable again? Then sell out. Sell the whole oil part of the company and either
•find a new investing target for the money, such as renewable energy or a completely new area where you see potential for the future
•sell all assets, close the company and return the money to the shareholders
3. Start to expand and reduce your dependency on oil . Take those oil profits and look for new investment targets. Here can be talked about tobacco companies; they have expanded to completely different areas to perhaps improve their image or just to get that money from burning their hands. If you are afraid of the dark scenario, then begin to look for new opportunities and do not waste money in to new oil projects, unless they are of the best quality.
