Ok folks, we all know things are in the doo-doo for the industry, but im having real issues trying to get my bloody missus to realise just how bad things are. My prediction that i’ll be back in the NHS, God forbid (Im a Medic of course), by the end of the year are being dismissed as just my pessimism. I thought a recent paycut might make the coffee smell more intense but it appears not – anyone out there in the industry had the dreaded NRB? I know many have, even in our company who are reknowned for trying to keep people in some form of employment (i wont give its name out)…and with half of our fleet stood idle at present its going to get worse before it gets better.

Not in oil but the traffic is a lot better in Aberdeen.

Not 100% oil but we supply a decent % of our equipment into the oil and gas market. We are writing off that revenue for at least the next two years and focusing on building other markets. No point chasing money that isn’t there.

My wife works for a small north sea oil exploration company

Company is going under, wife’s been sent home hopefully still getting paid for now but prob have to go thru administrators for any redundancy

Loads of her mates are in a similar position

Gonna be a while before it picks up, new discoveries in the North sea were at an all time low before this happened

Speaking totally selfishly I’m glad I made the move to an operator a few years ago as I will be “safer” here than anywhere else in the North Sea. We’re one of the few to still be making (some) money even at this oil price. That being said I fully expect there to be more staff cuts as well as reductions in benefits. Probably not salary as this is a little trickier to implement but it’s not out of the question.

Pretty desperate down here too.

We’re down from a peak of about 3500 staff to ~1000. I’m sat in a cubicle of 12 desks, and I’m the only one!

At this point just treating every month’s salary as a bonus 🙁

Lots of guys I went to school with, who left with no qualifications but their dads/uncles etc. got them jobs offshore during the boom – these guys have been earning a very, very good wage for years as roustabouts, roughnecks etc.

What the hell do you do as a job back on the beach after that?.

The company I left last year’s share price has dropped from just under 60 USD to under 3 USD! Since I left they have sid off huge numbers of people. Those left were given a 20% pay cut.

Lots of guys I went to school with, who left with no qualifications but their dads/uncles etc. got them jobs offshore during the boom – these guys have been earning a very, very good wage for years as roustabouts, roughnecks etc.

You’ve been smart and have a sufficient warchest to weather the storm…

Nobeerinthefridge – Member

Lots of guys I went to school with, who left with no qualifications but their dads/uncles etc. got them jobs offshore during the boom – these guys have been earning a very, very good wage for years as roustabouts, roughnecks etc.

What the hell do you do as a job back on the beach after that?.

Posted 14 minutes ago #

I work in a school for a town that consists largely of the above. We have been fighting to get a uniform and blazer on the pupils. The Blazer is a subsidised £30, we think one major factor for the 90% uptake is because parents are wanting to step off the £60-JW-hoodie-for-school-every-6-months roundabout.

Or alternatively get a mortgage the size a a third world countries debt, the flashest most impractical car and try and unload both to a market that want neither now.

You’ve been smart and have a sufficient warchest to weather the storm…

Canny really see that Jam bo, most of them are weekend millionaires when they come home, even though they’ve been doing it for 20 years.

Or alternatively get a mortgage the size a a third world countries debt, the flashest most impractical car and try and unload both to a market that want neither now.

^Far more like the reality.

What happens when the storage tanks are full? Do the Saudis stop pumping (unlikely) or does it get sold at silly low prices? But how much demand is there even at superlow prices?

What’s the endgame here?

From The Economist this morning

More trouble in store: the oil market
When will storage tanks overflow? This question is increasingly vexing oil markets, after yesterday’s news that American petroleum stocks rose by 4m barrels last week, to an 80-year seasonal high. Over-production is the main culprit for oil prices’ tumble earlier this week to below $27 a barrel, compounded by an anticipated surge of Iranian exports now that nuclear-related sanctions have been lifted. But the storage shortage is also menacing. The International Energy Agency, a forecaster, says global stocks soared in the fourth quarter of 2015 by a record 1.8m barrels a day; they usually decline in the northern-hemisphere winter. It expects them to rise by 385m barrels in 2016. Space on land will be limited; it reckons America can cram in only another another 100m barrels, and the world is adding only 230m barrels’ worth of capacity this year. Any excess will go onto seaborne tankers. After that, who knows?

Bit of a mixed bag in seismic processing. There are still a small amount of companies who are spending big money on new exploration and others are just pulling all their exploration plans.

My Dad works for Bapco in Bahrain, there’s a few worried faces at $27 a barrel or whatever it was the other day, but everyone seems to be thinking “business as usual”.

I work with a few guys who make temperature probes, a lot of their stuff goes into the Oil Production industry, they’re doing okay but their Oil projects are being “delayed”, postponed or cancelled so they’re having to make it up in other industries.

Down south in the Desk engineering sector it is pretty dire, project just canned, last week of re-reimbursable pay next week.
Chat in the kitchen just now was talk of friends who have been on the bench for a year – that will test any war chest.
Many companies are playing hardball with staff payoffs, government min, feeling foolish I did not spend the past 5 years earning double as contractor 🙁

All I can see is devastation. I’ve been working offshore as a diver/dive supervisor most of my working life. Now redundant. The main diving contractors have been quick to wield the axe. They’ve kept a small core of people on contract to fulfill existing obligations but nothing else. After the company backlog of work was gone the curtain came down & the vessels tied up. At the moment and for the foreseeable future the majors have budgeted for no capital expenditure in the NS. West of Shetland may be different but there’s no diving there. That means no construction work and the existing infrastructure will be kept insurable…only just.

Part of the problem the NS faces is the cost to produce which has risen exponentially over the last ten years. The whole industry has been beset by heath and safety culture, procedures from which you cannot deviate & a fear of (accident) statistics. It makes getting productive work done next to impossible in a realistic time frame.

Oil companies have openly courted this as they were the ones who sat as judge, jury and executioner. The contractors were busy jumping through the hoops and doing back flips to accommodate this and in the meantime the overheads were spiraling. At 120 US a barrel nobody cared, the money literally poured into the coffers and the share holders were clapping.

Cut to 2016 and the landscape looks somewhat different and the only way to remain viable is to slash overheads. Easiest and cheapest is to get rid of staff and to put any existing projects on ice until things improve. Part of the difficulty here is they are now getting irreplaceable talent out of the industry. You can’t keep a good man down and they’ll find work elsewhere and very possible not come back when things get better.

It’s a very deep rooted and complex problem of which the oil price is only a part.

My own opinion is that the industry will be changed forever. The price will recover, the work will start again in a limited way but it’ll be different at least for a handful of years. I think that the “jam for everyone” years have definitely gone.

The industry holds its breath and waits. The “cold reboot” we’re going through is going to see big changes once it’s over. “Clear and present danger” springs to mind.

For now, the smell of Helium is a distant memory & the Warchest has been opened. The espresso is flowing and the woodburner is lit but for how long, I’ve no idea.

D.

On collective consultation, second time in 12 months.. Grim but will just have to wait and see. At least working for a major operator the payoffs are decent. Since the first time this happened last year I’ve been building the warchest to weather the storm. If I do get the axe there will be some decisions to to be made, do you hole up here in Aberdeen and try to find something else which could take over a year (if not wanting to relocate) and burn into the pot or make a more radical choice and move and leave the industry…

Part of the problem the NS faces is the cost to produce which has risen exponentially over the last ten years. The whole industry has been beset by heath and safety culture, procedures from which you cannot deviate & a fear of (accident) statistics. It makes getting productive work done next to impossible in a realistic time frame.

As a member of the H&S fraternity, I’d like to add to the balance that each of those “accidents” from back in the good old days, was a coffin (depending on how much of an ‘accident’ was left afterwards) going home to a widow and kids, who then had no money and a huge mortgage because daddy was a contractor.

It’s one less Buncefield, Feyzin, Flixborough, Bohpal or Texas City.

I survived the first wielding of the axe in April but wouldn’t be surprised if there’s more to come. We have been running with a POB of anywhere between 150 (rarely) to just under 200 for years now but drilling has been canned and all the contractors that go with it so we will be down in the 80s from March. Some smart cookie hedged the oil a few years ago to make sure they had cash coming in ( due to a botched project) and at the time it looked dodgy but now we are getting around about an extra $30 a barrel because of it, no idea what will happen that runs out later this year.

At some point it will all swing back the other way and oil will be back over $100/barrel and they’ll be scrabbling round for contractors to try and bring back projects online. Like all things to do with human nature it massively over swings one way and then goes back the other…

The company I work for is part of the O&G of a major multinational.

Whilst we do some subsea and topside stuff it’s probably only 20% of our business.
The subsea project enquiries have dried up, it’s just spares now.
Our orders were down 16% last year (for other reasons as well as the O&G situation), not great.

So that’ll be redundancies and a pay freeze then…

At some point it will all swing back the other way and oil will be back over $100/barrel and they’ll be scrabbling round for contractors to try and bring back projects online. Like all things to do with human nature it massively over swings one way and then goes back the other…

Which would show as massive inflation, no? Which would lead to interest rates going up which would kill any economic growth as consumers would see so much of their post-tax income going in debt repayments?

Or am I being too negative about the outcome here?

To back up what TINAS said I’ll comment on this.

Oil companies have openly courted this as they were the ones who sat as judge, jury and executioner.

As a oil company worker in a role with a huge responsibility I don’t so much sit as a judge rather I sit in fear of a judge. Ultimately it would be me, or someone like me, who would be sitting the dock answering questions that end with “m’lord”.

Oh and for the medium to long term I can’t see oil getting much above $60-70. US shale can be turned on and off very quickly and this will likely act as a cap.

As a member of the H&S fraternity, I’d like to add to the balance that each of those “accidents” from back in the good old days, was a coffin (depending on how much of an ‘accident’ was left afterwards) going home to a widow and kids, who then had no money and a huge mortgage because daddy was a contractor.

It’s one less Buncefield, Feyzin, Flixborough, Bohpal or Texas City.

This, very much. If there’s one part of the whole shooting match that is to blame, it’s certainly not making the whole thing safer.

Or am I being too negative about the outcome here?

Well, we can’t be responsible for both a dip and a peak, well we can, but you can’t just pick out the -ves of each. Interest rates a re low, energy is cheap, engineering talent is cheap, that should be a positive for investments in anything other than oil.

There’s no point glossing over it – the situation is pretty dire. Neighbours are moving out, schools are emptying, new build house developments are like ghost towns.

I’ve had to go hunting for work (self employed). Work dried up with one engineering design consultancy, so I moved to a start-up pipelay contractor (Ceona). Ceona went bust – but I saw the writing on the wall and moved to a different pipelay contractor… in Paris! So at my own expense I am commuting from Aberdeen to Paris on a weekly basis. I barely see my wife and kids these days. But at the end of the day it could be worse.

The problem for me is that there hasn’t been any significant engineering design of projects in the last 2 years. And there is usually a 2 year time lag between engineering design and project execution. So in my game there won’t be anything significant for at least another two years. Once my current project in Paris comes to an end, who knows what I’ll move on to… more time on the bike I guess.

payfreeze for last 2 years.

been through two lots of collective redundancies so far.

ive remained because we had a serious amount of work in the southern hemisphere on gas projects.

that got canned due to formation difficulties…

we are waiting on significant middle east work and pickin up scraps …. if we dont get that it will be warchest time imo. That said we are as a company taking the time to try and break into new product lines for which im taking the opportunity to take the training for – another feather in your cap at this time is no bad thing.

was watching all my colleagues invest in the company shares when it got down below a certain value a couple months ago”it cant get any lower they said” …. it crashed to half of that this week – it didnt take a genius to see it coming when you read the financial reports.

was watching all my colleagues invest in the company shares when it got down below a certain value a couple months ago”it cant get any lower they said” …. it crashed to half of that this week – it didnt take a genius to see it coming when you read the financial reports.

I summarized it to my GF as:

“We’re $2billion in debt, have the same credit rating as Costa Rica (1 tier above junk), but at least Costa Rica has coffee!”

Sold my shares as although they’ve already collapsed twice, and there’s a chance they’ve hit bottom, they’ll be there for a couple of years now, no point jumping back in until they start to go up again when they could crash again just a likely.

..or make a more radical choice and move and leave the industry…

Just on this point. A good friend of mine, well respected in his area of expertise, is out of work in March. He has applied to lots of jobs, but rarely gets a response. He applied to a job in the nuclear industry, and they did look at him carefully, but in the end concluded that they wouldn’t want to take him because of the risk that he returns to oil & gas when the market recovers.

So making a switch in industry might not be as easy as I’d hope.

I now know a postman and a teacher, nothing against either profession, but it’s not quite the same!

If I dodge the bullet again personally I’ll continue with the shares scheme as its buy 1 get 2 free so that helps even things up. I no longer factor them into my sums anymore as you can’t bank on a moving target. The changes in our place are going to be pretty radical so let’s see what happens when the music stops and if there are any chairs left.

When I mention leave the industry I was thinking more of learning a trade. If I make the decision quick enough we can move back to Wales mortgage free with cash in the bank and a (reduced) final salary pension I can draw on from 55. A lot of thought has been going into this…

I’m in the marine seismic industry and can say that it’s working wonders for my mountain biking 😕

9 months since I was made redundant and I can’t see me returning to the marine sector any time soon!

So that’ll be redundancies and a pay freeze then…

Surely Springwatch will take you back? 🙂

Through two redundancy processes here. Can’t help but think that R.3 and R.4 are looming on the horizon.
As GoneF says the US Shale producers are significantly more agile and on a whole different time scale to Traditional O and G projects. General consensus is that there will be a rebound on the oil price, but my thought is that its not going to be significant enough that the NS will sustain the require IRR that companies demand these days. Therefore chances of major projects reaching sanction just gets lower and lower.
However, look at all the abandonment work that is required as COP dates head to the Left with the lower oil price.
(Which isn’t great being a geologist)

All of you Offshore Engineers should take a look at the Defence industry – specifically ship building/maintenance.
There are always vacancies in Barrow (building subs) and will be even more when Successor gets the green light (Trident replacement)

There are on-going works in Rosyth, Plymouth and Faslane.

I agree some of these places are a bit grim – but so is unemployment.

AS per previous comments about getting out of the sector – Historically my employer has lost lots of guys to O&G and there is an understandable reluctance to take guys from offshore in case they do the same if it picks back up.

Sadly, I can see their point.

Nobeer what industry is that? Having been in this industry for 20 years I think if I left then I’d not really want to look back.

Pharmaceuticals. Lots of instrumentation techs, pipe fitters, sparks and operations folks.

It’s not really about looking back though, more about having a job surely?.