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BLOG: $70 Brent Would See Mass Recruitment Drive in Oil, Gas

by Andreas Exarheas
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Rigzone Staff
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Wednesday, October 05, 2016
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BLOG: $70 Brent Would See Mass Recruitment Drive in Oil, Gas
A Brent crude price hike to $70 per barrel would see a mass recruitment drive in the oil and gas industry, according to a recent poll.

A Brent crude price hike to $70 per barrel would see a mass recruitment drive in the oil and gas industry, according to the majority of voters in a poll carried out on social media platform Twitter.
 

Thirty-three percent of the 406 people that took part in the poll believed $70 was the threshold Brent had to hit to reignite the oil and gas job market, with 29 percent of voters stating it would have to climb to $80 per barrel. Just 21 percent of voters believed Brent would have to rise as high as $90 to prompt a recruitment drive, and only 17 percent of voters thought a hike to $60 per barrel would result in any significant employment changes.

Andreas Exarheas
Andreas Exarheas, Associate Editor, Rigzone
Associate Editor, Rigzone

Brent crude crashed from highs of over $100 per barrel in 2014 to lows of $27 per barrel at the start of this year. The price drop resulted in hundreds of thousands of layoffs around the globe, as of May 6, according to Houston-based consulting firm Graves & Co, with several more oil and gas firms announcing significant job cuts since then.

Any significant, immediate oil and gas hiring since the market crash has been very rare. There have been announcements of projects with the potential to create tens of thousands of jobs in the oil and gas industry – such as the Tangguh LNG Facility Expansion and the Papua LNG Plan – but these projects often talk of hiring in the future, when many analysts predict a rise in the price of Brent. 

When Will We See $70 Per Barrel Brent?

No one can say for sure, but a range of oil and gas analysts have predicted similar times for the onset of $70 per barrel Brent.

Investment bank Jefferies International Limited stated in July that the oil market is in the early stages of a sustainable but protracted recovery and announced that $70 per barrel oil could be seen in late 2017 or early 2018. Jefferies reiterated this view Sept. 7 when it stated that Brent would average $72 per barrel in 2018.

Nomura research also predicts that oil prices will climb back to $70 per barrel by 2018, as do energy specialists at U.S. investment bank Piper Jaffray, and FirstEnergy Capital also believes that crude oil prices will rebound towards $70 per barrel in 2018 and climb as high as $80 per barrel by 2019.

Analysts have of course been wrong in the past, but if they’re right this time, we could be seeing a big recruitment push in just over a year. Let’s check back in 2018 and see how wrong, or right, this prediction turns out to be.


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WHAT DO YOU THINK?


Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

ML  |  October 11, 2016
I believe oil price will climb, but to what extend it still pose a greyish outlook. It could be more than what is going to be within the next 6-9 months and the mass hiring is not only just a dream but an exercise to snatch again...
Ian  |  October 10, 2016
I think mass hirings are a dream ... would not recommend holding breath while waiting for $70/bbl oil,
Atul Sharma  |  October 07, 2016
I like observations by Kirti Patel. It’s a shame the very EPC players that reap huge profits during hay days from skills of its workers do not think twice to lay off as the market goes down. Oil market like most others has seen “Sin” chart trends, unfortunately it’s the oil workers that depend on monthly remuneration are worst affected. Interestingly a convenient phrase used by many including so called sustainable EPC players from “Restructuring” where few senior executives to save their own skin call it “Restructuring”.
John Griffiths  |  October 07, 2016
McKinsey have published a study recently that suggests that due to the slowing of demand , the re-appearance in the market of Iran, Iraq and even Libya and the very high stock levels itis unlikely that any return to a familiar oil price like $70/bbl would take place much before 2019
Kirti Patel  |  October 06, 2016
That is funny ... and not so funny ... I as a Process/Chemical Oil/Gas Engineer, stuck it through with this industry even though I saw the several ups and downs since 1977. I saw swaths of talent and experts - friends throw in the towels ! Many went and became millionaires or multimillionaires doing other business - just because they saw the low value, corporations had, for them or for retaining them !!! They LEFT once ... and NEVER came back! During EACH of the up-down Cycle we SAW THIS - repeated!!! Thereafter, the same corporations and industries had to re-learn the same old mistakes and ... I saw Learners repeating EVERYTHING along the same learning/mistake curves !!! Then wondering why do these EPC companies KNOW these SIMPLE things ! That is because ALL the wizened ones LEFT during the LOWS and lay-offs and NEVER came back! At one time, I had the greatest wise and sage company, that I worked for (1977) at the start of my career - when we LAUNCHED the North Sea work BY THE SEATS OF OUR PANTS and still those ROBUST platforms are still WORKING !!! That Company followed ONE Philosophy - and I have NOT seen ANY other do the SAME in 30 years! That Company was CREST ENGINEERING, London. That is BEFORE it got assimilated by LUMMUS (1979) and that philosophy went by the way side. The PHILOSOPHY ! - was NEVER NEVER to LAY OFF the ENGINEERS - as long as they could manage. They managed by reducing pay temporarily, letting them do jobs of the mail delivery, Vendor Data Clerks, Filing Clerks, ... office-store administrators, HR Administrators, packing services, even chauffeuring to the airport dignitaries or clients, etc. !!! Then when things picked up - rehire the Office Staff and return the GRATEFUL Engineers to Engineering jobs! SUCH a SIMPLE Self enlightened philosophy ... The worst case I have seen is F....R where they get(JUST) the resumes of people (Engineers) on the street ... then they sell these resumes virtually to projects they BID on ... and then hustle the potential recruits through their own wholly owned subsidiary - TEMPORARY RECRUITING STAFFING agency - and the POOR Engineers herded like sheep to the pen! To be fleeced when the project ends! Anyway - that is just as word to the wise. Keep the HARD gained (degrees) DEGREED and TALENTED ... with this SIMPLEST of SIMPLEST Simpleton Philosophy ! - You can NEVER lose! Hope I have given some sage and true relighting wisdom to the Oil/Gas Industry! Best wishes to our entire industry ... on which humanity has survived and grown on, all these years ! Otherwise all the worlds foress would have been deforested and gone! Starving for Oxygen ...


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