Major U.S. banks are preparing to seize oil and gas companies in North Dakota to avoid losses on loans to energy companies that may go bankrupt.
U.S. Senator Kevin Cramer joined Good Day Dakota to discuss how he and other lawmakers are working to avoid this scenerio.
Cramer began by explaining that the state’s oil and gas industry is comprised of large and mid-size companies, as well as a major supporting supply chain industry, so each company would be impacted differently if this scenario were to unfold.
Cramer and fellow lawmakers are currently working through The Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide companies with tools to restructure debt in order to avoid being seized by big banks.
Cramer reitered that every company is positioned differently and he indicated that in some cases seizures could become an option, but the preference would be for companies to continue operating on their own.
Cramer’s final message is that we need to defeat COVID-19 first and foremost in order to see North Dakota’s oil and gas industry through this current downturn.
“We have such a oil supply glut and a production glut that it’s going to take a while to work through that, but we can’t even begin to do that until people are flying again, driving again, factories are open again. So, really the bottom line for this as it is with everything; let’s get the economy going again so we can increase our demand,” explained Cramer.