With job security a major preoccupation for most Asian employees in the current downturn, NOCs appear to be an attractive employment option.
Uncertainties stemming from more than half a year of low oil prices have made job security a niggling issue facing most employees worldwide, including Asia’s oil and gas industry. Such concerns, frequently exacerbated by headline news reporting rounds of industry layoffs, have made employment at national oil companies (NOC) a desirable option for existing employees or potential candidates.
The downturn in the petroleum industry has already prompted many firms to reduce their capital expenditures (CAPEX) as global oil prices – which declined by more than 50 percent since the second half of 2014 after breaking through the psychologically significant $100 a barrel mark – showed little signs of recovery.
Several independent oil companies (IOC), including the oil majors, who are accountable to shareholders through their quarterly financial reports, were among those that wielded the axe on CAPEX budgets as they announced their spending plans in recent months.
CAPEX Cuts Announced by Major IOCs
The oil majors, including BP plc, Chevron Corp., Exxon Mobil Corp. and Total S.A., slashed their investment spending by 12 percent, while Royal Dutch Shell plc cut CAPEX by $15 billion over three years from 2015 to 2017, company data showed.
NOCs and IOCs Operate Differently
Like IOCs, low oil prices also hurt Asian NOCs, especially petroleum producers, prompting them to cut CAPEX budgets.
Malaysia’s Petroliam Nasional Berhad (PETRONAS) – one of the world’s more successful NOCs – shaved 10 percent off its capital spending this year, while China National Offshore Oil Corp. and Indonesia’s PT Pertamina trimmed their investment expenditures by 31 percent and 37.14 percent, respectively.
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