Rigzone Survey Highlights Top Companies Amongst Midstream Workers

Rigzone Survey Highlights Top Companies Amongst Midstream Workers
Midstream workers select their top companies in Rigzone's 2019 Ideal Employer Survey.

From pipeline expansions to investments in liquefied natural gas (LNG) projects, the midstream sector of oil and gas has seen a lot of activity recently.

Professionals who work in the midstream sector were able to select the companies they valued most in Rigzone’s 2019 Ideal Employer Survey.

The global survey garnered more than 11,000 respondents who represented more than 100 countries.

According to respondents who work in midstream, Royal Dutch Shell, plc claimed the coveted number one spot of ideal employer for the third year in a row.

ExxonMobil Corp. and Chevron Corp. claimed the second and third spots, respectively. BP plc ranked fourth and Total S.A. followed in fifth place to round out the top five.



Challenges and Opportunities

For all the planned projects and expansions, the midstream sector has also been grappling with access to capital.

“I think the midstream is the most attractive part of the energy complex for capital to underwrite those expansions, but it’s getting more difficult for the financing side of it,” Reid Morrison, global energy and U.S. energy and chemicals advisory leader for PwC, told Rigzone. “I think the overarching sentiment for the capital market is not favorable to anything to do with energy.”

Some may question whether the industry needs capital to survive.

“In midstream, the answer is ‘yes,’” said Morrison. “How they do that may be through more self-funding or having more creative financing that will probably have a higher interest rate and cost more.”   

In its second-quarter 2019 report which looks at oil and gas deals in the U.S., PwC said new short- to medium-term commercial contract arrangements are one of the reasons for the disconnect between investor expectations and performance for midstream companies.

“Commercial agreements of producers are not the kind that would historically be needed for large projects that have 30-year commitments,” Morrison told Rigzone. “A lot of these shale plays are short-cycle and the exploration and production (E&P) companies are reluctant to sign up for that commitment unless they’ve got such density of acreage and they see that they can manage that commitment.”

Despite its funding challenges, Morrison sees a great opportunity for the midstream sector in expanding into emerging economies.

“With limited opportunities within the mature markets like the U.S., Canada and Europe, you’re either going to forfeit that growth element of your strategy or you’re going to find a way to be one of the players who invest in the emerging economies – be it India or Latin America,” said Morrison.

While fully recovering from the industry’s most recent downturn, every sector has had to make adjustments to continue operating in “the new normal.”

“The recovery will be somewhat muted, so companies need to operate within their means and manage their businesses against the low-cycle economics so they’ll have the confidence they can survive,” Morrison said. “I think cautious optimism is a thing of the past.”


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