We are starting the new year with more bad news for those in the oil & gas industry.
Expectations of further job cuts ahead in the oil & gas sector in cost reduction exercises continues to plague the industry.
Oil prices have tumbled more than 70% since it began in 2014.
In the US alone, more than 70,000 were laid off since October 2014 and at least nine US companies had filed for bankruptcy so far in the fourth quarter of 2015, The Times reported that industry leaders estimated that around 65,000 jobs were lost across the UK oil & gas industry since 2014, while Bloomberg reported that lay-offs had passed the 250,000 mark around the world.
Last month, BP announced it would cut 4,000 jobs in exploration and productions globally by the end of 2017.
Meanwhile, Shell announced in Q3 2015 that itwill cut 7,500 jobs, and then further announced in December that 2,800 more jobs will be cut as a cost-cutting exercise.
Oil and gas consultancy DNV GL found in their study that nearly three-quarters of the 921 senior oil and gas executives it surveyed were preparing their companies for a sustained period of low oil prices, with job cuts one of the top three methods they cited to control costs.
The following are key findings by DNV GL:
- Headcount reductions look set to increase; 31 percent of respondents said they expected further cuts, up from 25 percent last year.
- Just over 30 percent of executives said they expected to make tougher decisions on capital expenditure, down from 44 percent last year, with the reduction coming from the fact that opportunities for further capex reductions are limited.
- Just 27 percent expect to increase pressure on the supply chain, down from 31 percent in 2015, again because suppliers have already been squeezed almost as much as possible already.
The whole outlook seems to be rather grim.