More than 4,00,000 jobs lost in oil and gas sector in 2020
America has been the most affected as it lost 2,00,000 jobs in oil and gas sector
The oil and
gas sector has cut more than 400,000 (four hundred thousand) jobs in 2020 globally.
According to Rystad Energy, half of those jobs were in the United States where
big exploration and most large oil service companies are headquartered. US
has lost more than 2, 00,000 (two hundred thousand) jobs in in 2020 so far.
Oil and gas
companies worldwide are taking an axe to their employment rolls, shedding
workers to survive what is expected to be a prolonged stretch of weak demand. Exxon
Mobil Corp said it will cut its workforce by 15%, or about 14,000 people, along
with oil majors Chevron Corp and Royal Dutch Shell Plc.
Coronavirus
has devastated swathes of the global economy, with energy, travel and
hospitality among the industries hit hardest. Energy companies were already
struggling with weak returns, particularly those operating in US shale regions,
but have had to double down on cost cuts as investors pressure companies to
improve margins.
“The
COVID-era reality across the oil industry is austerity on an epic scale. There
is no escaping the fact that this means, among other things, job losses,” said
Pavel Molchanov, analyst at Raymond James. In addition to Exxon, Chevron Corp,
Australia's Woodside Petroleum Ltd and Canada's Cenovus Energy Inc all
announced plans in recent weeks to cut staff.
The downturn
has been particularly harsh in the United States, the world’s largest crude oil
producer. The nation has recorded the most deaths from coronavirus, and the
damage from the pandemic has sent unemployment to about 8%.
US Energy
Secretary Dan Brouillette said it is unlikely to return to the peak, near 13
million barrels per day, reached in 2019, largely through the use of fracking
technology used by shale companies. The shale industry has been hit hard by the
pandemic because it is easy for oil firms to cut staff and spending in the
sector.
Fracking has
become a hot-button issue in the U.S. presidential campaign. Democratic
challenger Joe Biden wants to limit fracking on federal lands, while incumbent
President Donald Trump has pushed for more drilling, and argues Biden’s
position would destroy jobs.
Consolidation
is helping drive job cuts. Chevron plans to eliminate roughly 25% of the staff
acquired with Noble Energy, which it acquired this month. Shell said its oil
output likely peaked last year, and it plans to cut roughly 10% of its
workforce. Cenovus said it will cut 25% after it buys rival Husky Energy Inc
HSE.TO.
In
Australia, more than 2,000 oil industry jobs have been cut since March,
including at Exxon and Chevron. Top independent gas producer Woodside said
earlier this month that it would cut around 8% of its workforce.
Mohammad
Barkindo, secretary general of the Organization of the Petroleum Exporting
Countries, recently expressed concern that the pace of oil demand is below
expectations, potentially requiring major producers to maintain production
cuts.
In an
outlook released earlier this month, BP Plc laid out two scenarios that suggest
world oil consumption, roughly 100 million barrels per day, peaked last year.
BP Plc BP.L recently cut about 50% of its exploration team as it shifts
operations towards renewable energy development.
Currently,
futures markets suggest crude prices may not advance beyond $40 a barrel for at
least two more years due to weak demand, and that could limit hiring.
“The
practical reality is when you have oil prices in the $30 to $40 range, I don’t
think many companies having the luxury to wait for a recovery,” said Alex
Pourbaix, chief executive at Cenovus.
Rukhsana Manzoor Deputy Editor
Use of fuel will be less as expected in coming time which may increase unemplyment
ReplyDelete