Work oil industry what could happen to jobs

[WilliamCave]

I work and travel for my job

I work in the oil industry and the price of oil is dropping like a rock.

Has me a little concerned because I work in refineries on shut downs , outages etc

Any feed back on what other posters that work in the industry how it might effect our jobs .

[daveAustin]

Well they could start by paying you chaps a bit less; one of the reasons oil is expensive in the first place methinks... $1000+ a day anyone? Seriously, I would be a bit concerned as some of the big firms (BP, Halliburton) have been laying people off. At the least, I think we'll see more and more local hands being used for jobs here. Save up, quick!

[impulse]

Good for some:

http://www.rigzone.com/news/article.asp?a_id=135948

Not so good for the rest of us:

http://www.rigzone.com/news/article.asp?a_id=136351

I'd put that under the category: What's gone wrong with capitalism?

[WilliamCave]

Good for some:

http://www.rigzone.com/news/article.asp?a_id=135948

Not so good for the rest of us:

http://www.rigzone.com/news/article.asp?a_id=136351

I'd put that under the category: What's gone wrong with capitalism?

Thanks for the links

[Soutpeel]

All the current price is doing is cleaning out the dross in many companies SBM for example has just got rid of 1200

What is happening here is cyclic every few years, clean out of person, back to efficient bare bones operations, as the price starts increasing again, which it will, start hiring again until the operations end up "bloated" with useless fkcers ,hangers on and chancers the process starts all over again, get rid of them as etc

[Soutpeel]

Well they could start by paying you chaps a bit less; one of the reasons oil is expensive in the first place methinks... $1000+ a day anyone? Seriously, I would be a bit concerned as some of the big firms (BP, Halliburton) have been laying people off. At the least, I think we'll see more and more local hands being used for jobs here. Save up, quick!

Why ? The labour costs are typically a very small component, 30k/m salary is not high cost in this businesses

By local jobs you mean Thailand ? The O&G game is already around 98% local labour anyway, the expats that are left are the ones that are needed and will not be going anywhere or taking a pay cut, besides the gas side of the business in Thailand is not really affected by all this as its the government via PTT who buys or locally produced gas, and Thailand needs the gas

[bangsaenguy]

Refineries do not normally get shut down so readily. New projects are being put on the shelf though. Nothing wrong with $1000 per day. It's a living wage. with a downturn in new projects, companies will try to reduce salaries. They always do.

Edited December 14, 2014 by bangsaenguy

[Gonsalviz]

You could be screwed or not.

[bangsaenguy]

yep

[catman20]

D.C.M

[KarenBravo]

I think there will be a notable drop in upstream activities and hardly any change in downstream activities. So, it depends on what particular field you're in.

O&G is cyclical and frankly, this has been the longest boom we have had without a bust for many decades.

[rotary]

As in 1981 and 2008 plus several points in between in upstream there will be shut downs and lay offs. To be honest we are seeing a level of incompetence at some supervisory levels that is shocking. This should be a good clean out I think for upstream. Not sure on the downstream side but supply and demand will take over now.

Edited December 15, 2014 by rotary

[recycler]

If you're in shutdowns in refineries there is not much to worry, they simply pay less for their input oil and gas, but demand will not drop, so refining goes on.

With lower energy prices consumption may even rise. Also the stricter environmental requirements all over the world leads to more shutdowns as there's more changes of catalyst etc. to comply with the latest standard on purity of the products.

There will be less money available on exploration and production in more difficult fields as in many cases the price of oil and gas will drop below the cost of getting it.

[HUAHIN62]

What I have read is that the deep sea wells and about 14 out of the 18 US shale areas are under threat if the price keeps low (below $ 70 ) for 12 months or more. One of the problems with the shale operations are that their well head price is between $10 and $ 20 lower that the WTI, due to pipeline/rail/transport and storage costs. But remember that everything that goes up comes down and everything that goes down comes up, well in economic terms in any case. Good luck and hang on.

[Soutpeel]

I think there will be a notable drop in upstream activities and hardly any change in downstream activities. So, it depends on what particular field you're in.

O&G is cyclical and frankly, this has been the longest boom we have had without a bust for many decades.

Actually the arse fell out the market in 2008 and the same things started happening and have recovered by mid 2009, similar thing happening now, call it a market correction if you will

[Leung Falang]

Moved back to Texas in the late 90's, got signed up with an ISP (Internet Service Provider). I asked if he was former telephone guy (I am). He said no, oil field here in West Texas- I changed because I got sick and tired of the ups and downs in the oil business. Looks like we still have it. Shale is booming from over more than half of Texas. Few can afford a normal motel room in Odessa.

[KarenBravo]

I think there will be a notable drop in upstream activities and hardly any change in downstream activities. So, it depends on what particular field you're in.

O&G is cyclical and frankly, this has been the longest boom we have had without a bust for many decades.

Actually the arse fell out the market in 2008 and the same things started happening and have recovered by mid 2009, similar thing happening now, call it a market correction if you will

The year 2008 was an excellent year in my field (seismic), which traditionally lags drilling by two years. The year 2010 wasn't that great, but, it wasn't that bad either.

For a real slump in seismic exploration activity, I'd have to go back to the late nineties.

[Don Aleman]

" BEAM ME UP SCOTTY " !

[powdermonkey]

Low oil price = productivity drives = mergers, layoffs, exploration scaled back, projects cancelled/deferred, shutdowns shortened to essential work only etc

Shutdown work still needs to happen although it might come with lower wages due to more people being available for work with similar skill sets and the shutdown duration will probably be shortened to essential work only. For yourself, there is also the chance you will be replaced by "local" hires due to the redundancies coming up unless you possess a skill that is unique to most of the workers.

As others have said - always comes and goes in cycles and ovevrall is good for businesses to get back to basics and get rid of bad assets. ALso cleans out companies that have too much debt to asset/cash ratio.

[RigPig]

The price is being "manipulated" by the Middle East to make the economics of all of the shale oil being harvested in the States uneconomical and regain more market share and therefore retain control of the industry. It is because they haven't cut production there is now a "glut" available in the market place and therefore the price has fallen.

They are still pulling it out of the ground so I guess they will need to refine it.

SORRY I can't find the link to the article I read.....

[KarenBravo]

Of course, punishing Russia for it's Ukraine adventure, with low oil prices is another side benefit.

[Asiantravel]

U.A.E. Sees OPEC Output Unchanged Even If Oil Drops to $40

http://www.bloomberg.com/news/2014-12-14/u-a-e-says-opec-won-t-change-output-even-if-price-drops-to-40.html

[connda]

They will disappear until the price of oil is rigged back up. Duh!

[liddelljohn]

On many facilities especially offshore , maintenance and planned structural inspections surveys etc must continue for insurance and regulatory reasons , so there will be work but maybe less money and less days .

[powdermonkey]

The price is being "manipulated" by the Middle East to make the economics of all of the shale oil being harvested in the States uneconomical and regain more market share and therefore retain control of the industry. It is because they haven't cut production there is now a "glut" available in the market place and therefore the price has fallen.

They are still pulling it out of the ground so I guess they will need to refine it.

SORRY I can't find the link to the article I read.....

Short term gain really for OPEC.

The more expensive shale will shut in due to lower prices (aquisitions and mergers will be made during this period consolidating the sector) but in the long run the low oil price will drive inovation and cost cutting to shale plays and thus lower costs comparatively to OPEC. Long term helping the shale plays become lower cost alternatives or comparable.

Added bonus for the shale industry is that low oil price also drives deflation and current high design/construction costs come down thus again helping lower cost of shale and other plays.

[RigPig]

U.A.E. Sees OPEC Output Unchanged Even If Oil Drops to $40

http://www.bloomberg.com/news/2014-12-14/u-a-e-says-opec-won-t-change-output-even-if-price-drops-to-40.html

I agree 100%

[RigPig]

The price is being "manipulated" by the Middle East to make the economics of all of the shale oil being harvested in the States uneconomical and regain more market share and therefore retain control of the industry. It is because they haven't cut production there is now a "glut" available in the market place and therefore the price has fallen.

They are still pulling it out of the ground so I guess they will need to refine it.

SORRY I can't find the link to the article I read.....

Short term gain really for OPEC.

The more expensive shale will shut in due to lower prices (aquisitions and mergers will be made during this period consolidating the sector) but in the long run the low oil price will drive inovation and cost cutting to shale plays and thus lower costs comparatively to OPEC. Long term helping the shale plays become lower cost alternatives or comparable.

Added bonus for the shale industry is that low oil price also drives deflation and current high design/construction costs come down thus again helping lower cost of shale and other plays.

OPEC doesn't think too far ahead I don't think. The King of Saudi (and I suspect most of his cronies / side kicks) aren't really too worried about the money. I suspect there are other reasons for creating this.......

[canman]

First thing you should learn in the oil industry is to make sure you have an emergency fund. It's a cyclic boom and bust business, always has been.

The usual indicators are:

first they cut down on the seismic, already doing so

vessel utilisation goes down and is happening

exploration drilling goes next, keep an eye on the rig count numbers they will start heading south soon

If it gets real bad you will see already planned developments put on the shelf

Some are saying we will see $40 oil in a couple months. That will not be good if it is sustained for any amount of time.

[KarenBravo]

First thing you should learn in the oil industry is to make sure you have an emergency fund. It's a cyclic boom and bust business, always has been.

The usual indicators are:

first they cut down on the seismic, already doing so

vessel utilisation goes down and is happening

exploration drilling goes next, keep an eye on the rig count numbers they will start heading south soon

If it gets real bad you will see already planned developments put on the shelf

Some are saying we will see $40 oil in a couple months. That will not be good if it is sustained for any amount of time.

I have to disagree with the order. It doesn't happen in the same order as the natural progression, it happens on cost.

Seismic surveys are cheaper by a very wide margin compared to drilling. Drilling stops first, seismic surveys afterwards.

[canman]

First thing you should learn in the oil industry is to make sure you have an emergency fund. It's a cyclic boom and bust business, always has been.

The usual indicators are:

first they cut down on the seismic, already doing so

vessel utilisation goes down and is happening

exploration drilling goes next, keep an eye on the rig count numbers they will start heading south soon

If it gets real bad you will see already planned developments put on the shelf

Some are saying we will see $40 oil in a couple months. That will not be good if it is sustained for any amount of time.

I have to disagree with the order. It doesn't happen in the same order as the natural progression, it happens on cost.

Seismic surveys are cheaper by a very wide margin compared to drilling. Drilling stops first, seismic surveys afterwards.

Yes and no. The exploration budget gets cut first ie seismic and drilling. It's been my experience that seismic budgets are easiest to cut as the contracts are shorter term and easier to cancel than rig contracts. Your milage may differ