While high crude oil prices at around $100 a barrel have produced a boom in the oil and gas job market in recent years, the decline in prices seen in the last few months is unlikely to result in massive job cuts any time soon, according to international energy recruitment firm EarthStream Global Limited's Asia Pacific Managing Director Kevin Gibson.
"While there will be a slowing of hiring within some of the organizations with high cost bases there has been such extreme skill shortage in a variety of disciplines in recent years it will not mean that there will be mass unemployment any time soon," Gibson said in a article made available to Rigzone.
EarthStream believes that $80 a barrel oil price would most likely produce a sweet spot that benefits efficient operators and lead to a shake out of over-leveraged speculators in the petroleum industry.
"For the oil & gas majors and well run operators there are not that many projects of theirs that can't produce a return at $80 a barrel. As such there will still be a relatively strong employment market in this subsector," Gibson said.
The recruitment firm expects a number of well run businesses with long term field development plans to seize opportunities during this window period to secure "good people" in the absence of the extreme upward salary pressure that human resource departments have been struggling with recently.
EarthStream believes probably the biggest impact of lower oil price will be felt in the "US fracking sector which has been a gold rush with companies bidding up salaries to incredible levels and creating their own cost issues."
"The super profits that $100 oil generated attracted highly leveraged private equity firms into writing checks for marginal wells, where they hoped to cash out quickly. As they came in late, they naturally paid extra-high prices for leases, staff and equipment, and drove up those costs for everyone else," Gibson observed.
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