Oil Price: Contractor cuts
Discussion
GruntyDC5 said:
rossybee said:
Baker Hughes paying off 7,000 worldwide.....really not good 
12% of their global work force. I know because I'm one of the unfortunate ones. Still the fun of the Halliburton takeover to come after that as well.Edited by GruntyDC5 on Wednesday 21st January 13:42
I follow Eagle Ford on FB which although is Texan offers a pretty frank look at the industry as a whole...
https://m.facebook.com/profile.php?id=453122191458...
My brother in law was laid off last week from what was considered a relatively safe role :/
https://m.facebook.com/profile.php?id=453122191458...
My brother in law was laid off last week from what was considered a relatively safe role :/
The agent I work through here in Angola announced at the end of the year that they had secured several years contract with Total, but at reduced rates and warned us there would be revised rates in this years contracts.
Some have had up to 40% rate cut, my rate has not been cut but I have lost some travel time and we can either give up business class travel and travel economy booked by the agent or take a lump sum per rotation and look after our own travel. Downside of that is while the money is enough for business class if you shop around, if you miss a helicopter flight it costs you $2500.
Fortunately I am onshore based so don't have that problem.
Cuts all round but for me at least it could be a lot worse.
Some have had up to 40% rate cut, my rate has not been cut but I have lost some travel time and we can either give up business class travel and travel economy booked by the agent or take a lump sum per rotation and look after our own travel. Downside of that is while the money is enough for business class if you shop around, if you miss a helicopter flight it costs you $2500.
Fortunately I am onshore based so don't have that problem.
Cuts all round but for me at least it could be a lot worse.
I don't work in oil, but I do live in the NE & run a business so it does affect me in a way. What I would like to know is - what are the cuts for, i.e. are they taking less oil out of the North Sea and therefore need less staff; or is the same coming out, and the companies are trying to do it more efficiently with less staff?
Just have a look at the graphs for the price of Brent..
At these levels a lot of the North sea is uneconomic, add in aging infrastructure that requires a lot costly maintenance etc etc..
Companies have hedged the price they can sell it on at and it's all extemely complex but basically the confidence is shot at the moment!
At these levels a lot of the North sea is uneconomic, add in aging infrastructure that requires a lot costly maintenance etc etc..
Companies have hedged the price they can sell it on at and it's all extemely complex but basically the confidence is shot at the moment!
As above, the existing assets produce more sea water than oil in most cases, and many are gas deficient. Lots of them have to bunker diesel from boats regularly to use for power generation, and the loads are typically megawatts' worth of power per platform. The platforms themselves are old and tired, and need lots or rectification work to be remotely safe to inhabit let alone operate. Add in the additional taxes levied on hydrocarbon production in the UK (and Norway) and the cost of producing a barrel of oil works out at between roughly $50 and $80 depending on the particular asset and field.
With those sorts of break even prices, there is no incentive for multi-national companies to invest money on exploration, redevelopment or upgrades which they won't make a return on, when they could produce in Africa for $20/barrel.
A lot of the cuts are to roles not essential to continue production with what they have now - i.e. the intended projects and improvement investments get shelved and those engaged in them are surplus to requirements. There probably are a degree of made-up roles in some cases where the positions chopped are not core business to operators. In good times there tends to be a bit of empire building, and in bad times the empires get released and 3rd parties are used to do work as and when needed. That's a massive generalisation but it will apply to a reasonable proportion of cases.
With those sorts of break even prices, there is no incentive for multi-national companies to invest money on exploration, redevelopment or upgrades which they won't make a return on, when they could produce in Africa for $20/barrel.
A lot of the cuts are to roles not essential to continue production with what they have now - i.e. the intended projects and improvement investments get shelved and those engaged in them are surplus to requirements. There probably are a degree of made-up roles in some cases where the positions chopped are not core business to operators. In good times there tends to be a bit of empire building, and in bad times the empires get released and 3rd parties are used to do work as and when needed. That's a massive generalisation but it will apply to a reasonable proportion of cases.
Corpulent Tosser said:
The agent I work through here in Angola announced at the end of the year that they had secured several years contract with Total, but at reduced rates and warned us there would be revised rates in this years contracts.
Some have had up to 40% rate cut, my rate has not been cut but I have lost some travel time and we can either give up business class travel and travel economy booked by the agent or take a lump sum per rotation and look after our own travel. Downside of that is while the money is enough for business class if you shop around, if you miss a helicopter flight it costs you $2500.
Fortunately I am onshore based so don't have that problem.
Cuts all round but for me at least it could be a lot worse.
er, I don't think there'll be much sympathy going around for having to give up Business Class travel!Some have had up to 40% rate cut, my rate has not been cut but I have lost some travel time and we can either give up business class travel and travel economy booked by the agent or take a lump sum per rotation and look after our own travel. Downside of that is while the money is enough for business class if you shop around, if you miss a helicopter flight it costs you $2500.
Fortunately I am onshore based so don't have that problem.
Cuts all round but for me at least it could be a lot worse.
Edited by rossub on Thursday 22 January 19:31
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