The Downside of the Boom
North Dakota took on the oversight of a multibillion-dollar oil industry with a regulatory system built on trust, warnings and second chances. NOV. 22, 2014
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More Job Losses Coming to U.S. Shale
More Job Losses Coming to U.S. Shale
With the recently concluded nuclear deal between Iran and the P5+1 countries, oil prices have already started heading downward on sentiments that Iran’s crude oil supply would further contribute to the already rising global supply glut. The economic crisis in Greece, OPEC’s high production levels and China’s market turmoil have created more pressure on oil prices, making a price rebound look highly unlikely in the near future.
So, with the prices of both Brent and WTI moving towards $50 per barrel, the short to medium-term outlook for oil remains mostly bearish. This is bad news for the U.S. shale sector which is already dealing with rising debt and the ever-increasing risk of default.
A recent Bloomberg report stated that U.S. driller’s debts stood at $235 billion at the end of first quarter of 2015, which is quite worrying. Does this mean that the U.S. oil sector is likely to witness a lot more layoffs than we have seen so far? Surprisingly, a recent IHS study had revealed that the U.S. shale sector has been boosting job creation in addition to supporting around 1.7 million jobs in U.S.
All this as the overall unemployment rate in U.S. has been declining since previous years. But with rising negative sentiment pertaining to oil prices, is U.S. the shale sector prepared to face one of its biggest tests yet? Will the industry be able to sustain another long period of low oil prices or will it once again resort to trimming its workforce?
Related: Shale Industry May Need A Complete Rethink To Survive
Low oil prices will most likely result in more job losses
Since the oil price collapse of last year, we have seen how oil field services and drilling companies have slashed thousands of jobs in order to reduce costs and cut their operational spending. Some of the major oilfield companies like Schlumberger, Halliburton and Weatherford have already announced close to 20,000 layoffs as of February 2015.
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Oil Plunge Hits Office Market, But “So Far” No Apocalypse
Oil Plunge Hits Office Market, But “So Far” No Apocalypse
“Here in Houston a number of projects have been canceled. Engineers are put on ‘hold.’ There have been some contract engineers laid off, and hiring has been suspended. Everyone is waiting for the other shoe to drop.” That’s how an engineer in the energy sector saw it. And it captured the mood.
So the sky isn’t quite falling on the Houston property market. Not yet. With 18.4 million sq. ft. of office space under construction, the epicenter of the US energy industry is far ahead of number two, New York City with 7.6 million sq. ft. under construction. Dallas is number four with 7.5 million sq. ft. Much of the growth in Texas over the last few years has been spawned by the “shale revolution.”
But the layoff announcements in the oil-and-gas sector are hailing down on the industry.
Weatherford International – headquartered in Houston – announced last week, after reporting a quarterly loss of $475 million, that it was axing 5,000 employees, or 8.9% of its global workforce, to save $350 million per year. Yesterday, Halliburton announced 6,400 job cuts, on top of the 1,000 announced in December. Baker Hughes, which is being acquired by Halliburton, announced 7,000 job cuts. In January, Schlumberger announced 9,000 layoffs. This brings the layoff announcements of the four largest oil-field services companies to 28,400. It’s all about cash flow, now that pricing chaos has swept over the once flush industry.
Oil majors and smaller companies have chimed in with their own layoffs. Privately held companies might quietly proceed with cuts. And many of these folks would have needed some office space.
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Where Oil and Politics Mix – NYTimes.com
Where Oil and Politics Mix – NYTimes.com.
TIOGA, N.D. — In late June, as black and gold balloons bobbed above black and gold tables with oil-rig centerpieces, the theme song from “Dallas” warmed up the crowd for the “One Million Barrels, One Million Thanks” celebration.
The mood was giddy. Halliburton served barbecued crawfish from Louisiana. A commemorative firearms dealer hawked a “one-million barrel” shotgun emblazoned with the slogan “Oil Can!” Mrs. North Dakota, in banner and crown, posed for pictures. The Texas Flying Legends performed an airshow backlit by a leaping flare of burning gas. And Gov. Jack Dalrymple was the featured guest.
Traveling through the “economically struggling” nation, Mr. Dalrymple told the crowd, he encountered many people who asked, “Jack, what the heck are you doing out there in North Dakota?” to create the fastest-growing economy, lowest unemployment rate and (according to one survey) happiest population.
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