Musings: Oil Patch Unemployment Is Challenge For Industry's Future

Musings: Oil Patch Unemployment Is Challenge For Industry's Future
Oil patch layoffs continue to grow, and the shale oil states represent the epicenter. G. Allen Brooks takes a look at the latest oil industry unemployment statistics.

This opinion piece presents the opinions of the author.
It does not necessarily reflect the views of Rigzone.

Several recent media stories have focused on rising petroleum industry layoffs in response to the decline in global oil prices and the resulting fall in activity. Just how many people have already lost their jobs is difficult to accurately determine. Job loss estimates are being provided to the media by various personnel recruiting firms, although there are also data points available from the Bureau of Labor Statistics (BLS).

Since oil prices began dropping last December, energy companies have announced layoffs in excess of 100,000 jobs, according to The Wall Street Journal. It references an estimate of at least 91,000 layoffs having already occurred according to Graves & Co., a Houston-based consulting firm. On the other hand, according to recruiting firm Swift Worldwide Resources and as reported by the Houston Chronicle, more than 120,000 jobs worldwide have been shed by energy companies. Those totals are going up as Schlumberger (SLB-NYSE) announced last Friday a cut of an additional 11,000 worldwide employees bringing its total staff reduction so far to 20,000, or approximately 15% of its pre-oil-price drop labor force.

According to the BLS data, since October, direct employment in the oil and gas extraction industry, which is a subset of the mining industry, has shrunk by 3,000. This category had added 50,000 jobs since 2007, reaching a peak in October of 201,500 jobs. In the case of energy support firms, where employment peaked at 337,600 jobs in September 2014, some 12,000 layoffs have occurred so far. Unfortunately, the chart accompanying another Wall Street Journal article focused on energy industry employment seems to show much larger labor forces for both oil and gas extraction and support activities. It is quite possible that the categories plotted in the chart in Exhibit 8 (next page) are for the broader mining sector, which includes the oil and gas industry. Regardless of the specific figures, the visual image presented by the chart is of an industry that is in decline, which increasingly resembles the pattern beginning in mid-2008.

Musings: Oil Patch Unemployment Is Challenge For Industry's Future
Source: The Wall Street Journal


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G. Allen Brooks works as the Managing Director at PPHB LP. Reprinted with permission of PPHB.


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Mark Cooper | Apr. 23, 2015
According to our internal tracker at Oil Consultants, there have been 117,000 reported layoffs in the media since December... Date Company Country Losses Acme 99 AIT 28 Apr-15 Apache International 350 Archer Ltd. 1,000 AST 69 Atlas Tube Inc. 35 Feb-15 Baker H International 10500 Jan-14 BHPB International 3000 Mar-15 BP International 1200 Cajun Cutters 2 Caterpillar 200 Chaparral Energy 121 Chevron 162 Civeo 1,000 CoP 230 Doepker Industries 58 Dresser-Rand 648 Enable Midstream 200 Enbridge 100 Ensign Energy Services 700 EOG Resources EOG +1.15% 150 ERVAZ 200 Mar-15 Exprogroup International 125 FMC Technologies FTI +7.5% 2,079 General Electric GE +1.09% 500 Jan-15 Halliburton International 9000 Helmerich & Payne HP +2.05% 2,130 Hercules Offshore 324 Mar-15 Husky International 1200 Husky Oil Sands 1,000 Key Energy Service 2,000 Laredo Petroleum 75 Lariat Services Inc. 265 Marathon Oil MRO +0.73% 400 MRC Global 270 Apr-15 Nabors International 5000 Newfield Exp 200 Nexen 400 OFS Energy Fund 150 Oilfield Trucking Solutions 93 Parker Drilling Company PKD -0.97% 270 Mar-15 Pemex mexico 10000 PostRock Energy PSTR +1.27% 14 Precision Drilling PDS +1.19% Corp. 1,000 PTC Seamless Tube Corp. 71 Quicksilver Resources 50 Range Resources RRC +1.56% 60 Sanjel 20 Dec-14 Santos International 520 sasol 1500 SBM Offshore 600 Apr-15 Schlumberger International 20000 Apr-15 Shell International 4700 Mar-15 Shell Canada 400 Feb-15 Statoil Norway 11500 Apr-15 Suncor International 1000 T&B Construction 20 Talisman 200 Talisman-Sinopec 300 Team TISI -0.02% Oil Tools 95 Tenaris 680 TimkenSteel 52 TMK IPSCO 248 Total 2,000 Mar-15 Transocean International 2700 Trican Well Services 125 Ultra Premium Oilfield Servi 78 US Steel X -0.27% 3,827 Vallourec Star 1,400 Weatherford 8,000 WireCo World Group 30 WPX Energy 80 Yates Petroleum 15


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