N Sea oil industry. What's the feeling at the moment?

It’s also battering everyone whose pension fund invested in oil company stock ie all of them.

Not really, the smarter fund managers have been moving away from oil. E.g. http://www.telegraph.co.uk/finance/personalfinance/investing/funds/10965211/Neil-Woodfords-Equity-Income-fund-the-full-list-of-holdings.html

Another 100 jobs to go

At $100 per barrel, US shale is economic. At $50 it’s not. There has been a lot of production of shale but very little actual profit.

It’s still coming out the ground and pushing prices down.

Not read the whole thread, but the main reason the price is so low is the Saudi’s want to crash the Russian economy; shale gas, renewables, etc are secondary to this. There’s growing anti-Russian sentiment in the West (largely stirred-up by people who should know better) and the Saudi’s have dropped the price to take advantage.

5% of Apaches work force also in the north sea going – but they are close to the bone rigs anyway.

the schlumberger one seems to me to be a trimming of the fat one – as i know for a fact they are still hiring new staff at the bottom…..while laying off staff in the middle.

TINAS, at the moment yes but the number of rigs being used to drill new wells is tumbling and freaked wells don’t flow for very long before they are depleted. My company is slashing its drilling budget way more in the US than in the UK and other markets.

Is the price drop down to increased supply from new fracking/tar sands sources in the US? Surely these will be the first to fold, thereby pushing the price back up to where it was?

“Is the price drop down to increased supply from new fracking/tar sands sources in the US”

keep up at the back

I know that Russia are hurting but what about Iran?

I think they are the Saudi’s target and think they will carry on till they have done them serious damage or the Iranian’s do what the Saudi’s want.

300 more jobs to go

Damnation!

It is turning into a bloodbath up here.

A mate was offered a contract position starting next week yesterday. Wonder if it that will happen now??

Job market is certainly getting congested at the moment….b*gg*r!

Aye, its brutal at the moment. We find out our fate in March but as you say Benz the whole sector here at the moment is grim. If it does happen the Mrs has come round to having to move mostly likely abroad. Time to batten down the hatches.

Juan,

You have inspired me towards Ltd Co name. Juan Kerr Consulting for me. Thanks!

Yes, not good at all.

Think Ak*r chopped another 10% off contractor rates yesterday. Now that news from TSE today. When will it stop….

Now is a good time to have some cash reserves and no mortgage. Hatches are well battened.

Alas the mortgage is a weight around the neck but the war chest can see us out for 3 years so no need for panic just yet. If it comes to it Aramco are always after folk…

4 on 4 off in the Far East doesn’t sound so bad, now that some guys are going from 2 on 3 off to 3 and 3.

I’m not convinced all the redundancies and double rate cuts are justifiable though. Every year (until this year) the industry moans about a shortage of engineers, and then the first whiff of a downturn and they ‘slash and burn’.

WGPSN and Talisman are heavy laden with contractors, I can see where they might have justifiable reason to panic. But BP, Shell, Chevron, Schlum, etc. should have ridden out the storm for a few months more before wielding the axe.

Now is a good time to have some cash reserves and no mortgage. Hatches are well battened.

Hmm I’m considering a mortgage at the moment. My skills are transferable outside this industry though.

shell announces £9.9 billion cuts

Oil company Weatherford to cut jobs in Aberdeen

another 100 jobs to go

Not north sea oil but I’m doing some work for a well service company in Calgary (so wells are a lot cheaper here being onshore)and they have just laid off 30% of their staff! A lot of long faces.

some of this is also about being seen to tow the line for the shareholders .

alot of the recent job losses for us have been shared and support services – ie reduction in head count rather than skilled staff…. but releasing it in a press release gives the shareholders confidence.

KCA Deutag says 230 North Sea jobs ‘at risk’

Halliburton that also announced a 6,400 job reduction globally today as well. Also noticed the other day Norwegian firm Reef have gone in to administration but UK side of the business is ok (probably for now) and on top of all that PWC released an article today saying that the industry should have heeded the warnings months before the price drop to cut costs and that firms need to plan to operate in a $50 a barrel environment as they think it’s here for the long term.

For me I think these job cuts are just the tip of the iceberg and we will see some pretty major announcements happening later on this year that are going to have an impact on jobs locally.

I feel very sorry for all of the people who have lost or will lose their jobs in Aberdeen, but the onshore job losses are very much as case of trimming the fat. Rumours abound around reducing the offshore workforce – forcing people onto 3&3 rotations (fundamentally unsafe IMHO) and accelerating decommissioning programmes on platforms that are still producing reasonably well.

While the North Sea isn’t productive enough to support the UK on it’s own any more – it does give us a certain level of energy security and that should be the main argument for the government to help out.

forcing people onto 3&3 rotations (fundamentally unsafe IMHO)

Well 4&4 isn’t that uncommon in other part of the world and the alternative of 2&2 would 1 not reduce any costs and 2 likely be worse for the home lives of the employees.

accelerating decommissioning programmes on platforms that are still producing reasonably well.

Production rates aren’t what determine this, it’s proftiability and whilst there is a role for the government to play it is also up to the industry to cut costs, both on and offshore.

Production rates aren’t what determine this, it’s proftiability and whilst there is a role for the government to play

Well, the tax rates aren’t helping, and that’s arguably a government issue.

It doesn’t really matter what rate your profits are taxed at, if you aren’t making profit you won’t be paying tax.

It doesn’t really matter what rate your profits are taxed at, if you aren’t making profit you won’t be paying tax.

Not sure what your point is. If there was zero tax, even a poor N Sea field would be profitable. At 62%, a lot will not be making money.

Not sure what your point is. If there was zero tax, even a poor N Sea field would be profitable. At 62%, a lot will not be making money.

Not when lifting costs per barrel are higher than the oil price. Even if the tax rate were zero with current costs and current prices there are many many fields in the North sea that would not be profitable.

Not sure what your point is. If there was zero tax, even a poor N Sea field would be profitable. At 62%, a lot will not be making money.

Taxes are applied to profits not revenues, producers are able to offset extraction costs (note I will stand corrected on North Sea oil explicitly if they have a different taxation mechanism)

Most of the worlds oil is not viable at 50 a barrel. It costs the Saudis only 10 to extract theirs so they can play a tough game, low prices hurt them much less than they hurt others. The big producing countries cannot afford to stop production as they need the revenue.

I suspect that there is a lot of overpaid staff and subcontractors getting fired at the moment. Some companies may be going further than they need and are making a mistake. Others are doing what should have been done a while ago. There are a few subcontract inspectors who I’ll glad not see again, that is unless their skill level and knowledge could be brought up to their level of arrogance. Breath and calm down.

I’m sure they could just reduce salaries instead of laying off people. I sit with people that earn my annual salary in 6 weeks, we work just as hard on technical jobs, just doing different things. Just feels like the industry has built itself this dreamy little rich bubble and won’t step down from it or let anyone burst it.

I’m sure they could just reduce salaries instead of laying off people.

They are doing both, well effecively.

I sit with people that earn my annual salary in 6 weeks,

I find that difficult to beleive. I’m on a very good wage but 6 weeks of my salary spread over the year is less than the minimum wage, assuming 45 weeks per year and 37 hrs per week.

Just feels like the industry has built itself this dreamy little rich bubble and won’t step down from it or let anyone burst it.

That’s not necessarily too far off the mark, however the reason for the high wages is that during times like there are cuts that are made so sensible people make allowances for the down times.

I find that difficult to beleive.

they’re younger than me too 😡

Don’t know what your job is, but in mine, people have a lot of years education, a lot of years experience, and a suitcase packed to travel to any crap-hole in the world, to do a job that periodically has lean spells where your transferable skills are limited and burger-flipping seems a viable career. I don’t think it’s greedy to expect to get paid for that.

I don’t think anyone expects you to do it for free, and I would say it is a minority of the UK O&G industry that have to travel to crap places in the world at the drop of a hat, and most are sat in offices scratching their nuts on higher than average salaries.

and most are sat in offices scratching their nuts on higher than average salaries.

*Raises Hand*

Then again with the degree and the skills that I’ve built up my salary would almost certainly be “above average” no matter what industry I worked in. There is also the small matter of the responsibility that comes with the job and the fact that when ever there is a difficult question being asked, guess whose desk it ends up on?

There are a few subcontract inspectors who I’ll glad not see again, that is unless their skill level and knowledge could be brought up to their level of arrogance. Breath and calm down.

haha, i bet you and i have met then 🙂

@mactheknife

never met so many O&G industry (mostly subcontractors but not all) inspectors who know so little, are obstructive (till the client is there), lie, on a power trip and who I would not trust with anything other than picking up a £50 note. This all in the last 3 or so years. It’s as if the industry has got really fat and gluttonous, has allowed its spending to get out of control.
If we get onto system designers I’ll blow a gasket.

I feel for a number of good people I know in the industry but there are some a..e covering f..k wits that deserve a cut in pay.

No worries though as it’ll be back up to $80 by end 2016 at latest (i hope :?), how many companies and people will have gone by then I’m not sure.

Mt, I have no idea who you work for or who the inspectors you have worked with are employed through but my experience has been the polar opposite of yours. I have bounced around different companies and different fields and although you do meet the usual chancers the inspection industry is not not full of them from my perspective. But there are a few companies out there who do employ the dregs.