Page 10 - NorthAmOil Week 35

NorthAmOil COMMENTARY NorthAmOil

Numerous shale
drillers are cutting staff
numbers.

reviews of ExxonMobil’s businesses in those of a restructuring process that is anticipated to
countries had been completed. conclude in the fourth quarter of the year.
Other companies carrying out cuts globally Pioneer already cut about 50 employees in its
include Norway’s Equinor – and in this instance well services business in June, and is estimated to
North American jobs are among those on the have around 2,300 staff.
line. The Norwegian company warned last week
of looming job cuts in the US and Canada – as What next?
well as the UK – that an Equinor spokesman The cuts are not surprising, given the oil and
described to Reuters as being significant. gas industry’s need to reduce costs and remain
The firm is planning to cut employee num- afloat during this downturn, with more uncer-
bers in the three countries by about 20% and tainty on the horizon. However, while previous
contractor numbers by around 50% in a bid to oil industry boom and bust cycles allowed com-
boost profitability in a lower oil price environ- panies to rehire workers when market condi-
ment, according to the spokesman. He added tions improved, an increasing number of people
that Equinor would also not drill any new expect at least a number of the current job losses An increasing
unconventional wells this year in the US, where to be permanent.
it has acreage in the Bakken and Marcellus shale This is attributed to a number of factors, number of people
formations. including oil and gas gradually falling out of expect at least
favour over the coming years as the energy
Shale scale-back transition continues to advance. The era of a number of the
The comments suggest that at least some of unrestrained spending on new production also
Equinor’s North American job cuts could be appears to be over, at least for now, and oil com- current job losses
related to the company’s shale operations. This panies are anticipated to remain under pressure
is in line with what other shale drillers are doing, to exercise fiscal restraint for years to come. This to be permanent.
with a number of them cutting staff numbers will drive the continuation of the current trend
since the industry downturn began in March. to do more with less.
Further lay-offs are also looming for the shale And additionally some jobs are simply being
industry, with a separate Reuters report saying eliminated as automation advances. This is com-
last week that two Permian Basin producers – pounded by the fact that an increasing number
Pioneer Natural Resources and Parsley Energy of jobs have been successfully done remotely
– were preparing to cut staff in the coming days. during the COVID-19 crisis, demonstrating
According to sources familiar with the mat- that even oil companies can make at least some
ter, Parsley is in the process of laying off about of their operations remote. As new advances in
10% of its 496 employees. The number of jobs automation and digitalisation occur in this envi-
that Pioneer is reportedly shedding has not been ronment, more and more manual jobs in the
disclosed, but the lay-offs are thought to be part field will become obsolete.™

P10 www. NEWSBASE .com Week 35 03•September•2020