Page 9 - NorthAmOil Week 48

NorthAmOil PERFORMANCE NorthAmOil
Halliburton to cut over 800 jobs, shut facilities in Oklahoma
OKLAHOMA
OILFIELD service provider Halliburton said this week that it planned to close an office in El Reno, Oklahoma, with the move set to result in 808 jobs being cut. The facility, located around 30 miles (48 km) from Oklahoma City, houses a dispatch command centre and several hydraulic fracturing crews.
In a December 2 letter filed with the Okla- homa Office of Workforce Development, Hal- liburton’s vice-president of the MidCon area, Michael Queener, wrote that the company expected to close the El Reno office. According to the letter, the more than a third of the peo- ple set to be laid off work with acids used in the fracking process and nearly a tenth perform cementing work for oil wells.
“The layoff is expected to be a permanent employment loss,” Queener wrote.
This is not the first round of job cuts Halli- burton has carried out this year. In the second quarter, the company reduced its North Amer- ican workforce by 8% and pulled fracking fleets out of service. Then in October, it cut 650 jobs in Colorado, New Mexico, North Dakota and Wyoming. Halliburton attributed these layoffs to slowing demand in those markets – which are all known for shale drilling activity. The company noted that most of the affected employees were given the option to relocate to other Halliburton offices where more activity is expected.
In an earnings call in October, Hallibur- ton’s chairman, president and CEO, Jeff Miller, warned that the company would be carrying out further streamlining of its operations, so the lat- est announcement comes as no great surprise.
The latest layoffs in Oklahoma illustrate that demand for services related to shale drilling remains lacklustre. Crude prices have remained
stubbornly low this year, with even a major pro- duction outage in Saudi Arabia in September only resulting in a brief spike before they fell back. The El Reno command centre was used to monitor Halliburton’s well completion oper- ations across various shale plays, not confined to Oklahoma alone. The region covered by the centre also included parts of Texas, Kansas and Colorado.
Halliburton also owns and operates a rail facility in El Reno, which is used to offload sand used by its crews in the fracking process across the Anadarko Basin. The Oklahoman newspa- per reported on December 2 that it was unclear how the layoffs would affect that operation.
This is the largest number of job cuts announced in Oklahoma by any oil company to date – previously announced layoffs have tended to involve smaller numbers. Until Hal- liburton’s move to shut its El Reno facility was reported, the largest number of job losses in the state this year had been 120, announced by well services firm BJ Services relating to its Yukon operation.
Steven Agee, an economics professor who is the dean of the Meinders School of Business at Oklahoma City University, told the Oklaho- man that Halliburton’s decision was probably a good indicator of what was happening across the industry more broadly. Efficiency gains are leading to more production being achieved with fewer wells drilled, which affects demand for oil- field services.
“When the nation’s oil production climbs from 5mn barrels a day to 12mn barrels a day, that suppresses the price,” Agee said. “That leaves those service companies in a Catch-22 situation.”™
The El Reno facility houses a dispatch command centre and several hydraulic fracturing crews.
Efficiency gains are leading to more production being achieved with fewer wells drilled, which affects demand for oilfield services.
Week 48 04•December•2019 w w w . N E W S B A S E . c o m
P9