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Bauer Business Focus

Why The Energy Industry Is Losing Investors

Energy companies saw a big drop in outside investment in 2018.

Florian Martin/Houston Public Media
Andrew Slaughter heads Deloitte’s Center for Energy Solutions in Houston.

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Energy companies saw the biggest drop in investment among major S&P 500 sectors in 2018.

This drop comes despite a robust recovery from the recent oil downturn and record production volumes.

But Andrew Slaughter, executive director of Deloitte's Center for Energy Solutions, said investors are still wary.

"The downturn was so severe and so long that many oil and gas companies are still grappling with restoring their financial health and their balance sheet and also restoring their portfolio health," Slaughter said.

And, he said, many companies have struggled to communicate their strategies and focus to the financial markets.

"And so there's a level of miscommunication, mistrust, lower confidence from the investment community, which is also, I think, going to take quite a while to dissipate," Slaughter said.

Deloitte recently published a report with strategy recommendations for oil and gas companies in times of volatile oil prices.

Click on the audio above to listen to the interview with Andrew Slaughter.

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