Since late last year, oil and gas companies globally have fought to sustain the drop in oil prices … layoffs ensued and companies large and small were affected. And according to a new study released by the Petroleum Labour Market Information (PetroLMI) Division of Enform, a safety association for upstream oil and gas in Canada, there’s a prediction that 185,000 jobs will be lost in Canada this year due to the drop in oil prices.
According to the study, in 2014, the oil and gas industry spent nearly $125 billion on exploration, development and production – which supported more than 720,000 direct and indirect jobs in Canada. About two-thirds of these jobs were concentrated in Alberta.
The Canadian Association of Oilwell Drilling Contractors (CAODC) recently forecasted that more than 25,000 Canadian drilling jobs would be lost due to weak oil prices, Reuters reported. CAODC president Mark Scholz said “potential policy changes in Alberta with respect to royalties” and other factors mean members “must continue to streamline operations and remain agile.”
CAODC’s predictions for drilling job losses align with the PetroLMI’s report. With an anticipated $31 billion reduction in capital expenditure, the biggest impact would be in oil and gas engineering construction firms with 75,000 jobs lost, followed by the support services sector which is heavily involved in exploration and development drilling at 26,000 jobs lost.
Compared to the Great Recession from 2008-2009, the study finds that job cuts from the oil and gas downturn are “larger in magnitude but comparable in scale” to the jobs lost in 2009. Additionally, the oil and gas downturn “poses different challenges” than the global recession and its impacts will “likely unfold in very different ways across industries and provinces.”
The study noted a still uncertain outlook for the oil and gas industry in 2016 and beyond, and that there are no indications the industry will bounce back as quickly in 2016 as it did in 2010 following the recession.
According to the study, “creative recruitment practices, such as upskilling the current workforce and effective management and retention of skilled and experienced workers will become more critical in the months ahead.”
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