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International accountant and shipping adviser Moore Stephens says companies in the offshore maritime sector need to keep a close watch on costs and manage their exposure to risk in the wake of the dramatic fall in oil prices.

In an emailed statement, Cassie Forman, a director with the Moore Stephens Shipping & Offshore Maritime group, commented: "It is remarkable how quickly the dramatic fall in oil prices has fed through to increasing levels of financial stress in the oil and gas services industry, where the sudden drop to around $50 a barrel is triggering cost-cutting across much of the sector. Oil and gas majors are already cutting costs, and several have recently announced cuts to investment in a number of major projects. Smaller players are also reconsidering their capital deployment.

"There was a significant increase in the number of insolvencies of UK oil and gas services companies last year. Although this increase is from a relatively low base, it is significant because insolvencies in the sector have been rare over the last five years."

Referring to the recent bankruptcy of market-leading bunker seller OW Bunker, Forman said: "This really set alarm bells ringing in the offshore maritime and shipping industries. Although the underlying reasons for the failure are still being analysed, the fall in oil prices is certain to have played a significant part."

Forman added: "Any industry which suffers what is effectively a 50 percent reduction in income over a three-month period is going to suffer. But any sector where the revenue is predicated on the price of oil, such as the offshore maritime industry, is particularly susceptible because of its exposure to counter-party risk and potential credit line difficulties.

"With oil prices now at their lowest level for five years or more, the offshore maritime sector needs to look at costs in light of its current reduced revenue stream. This is not a time for speculative or non-essential spending. Rather, it is a time for strategic financial planning with experienced advisers who understand the risks peculiar to the industry.

"The offshore maritime sector also needs to make sure that it has proper contingency planning in place, and effective risk management procedures embedded into the everyday activities of the company. Sound corporate governance and a proper management structure and technical support systems are central to the ability to identify, control and ultimately mitigate risk."