| Over 5K North Sea Jobs Lost in Battle of Low Crude Prices | |
| | |
|
“Desperate times call for desperate measures.”
Of late, most oil and gas firms across the globe seem to have taken up the aforesaid line as their motto. Thousands of jobs across various levels in the energy sector have been axed as firms grapple with the pricing weakness.
Oil and gas companies operating in the North Sea are no different. Rather, the effect of weak crude prices has been more severe in the region, as mature fields and high exploration and development costs already keep margins challenged.
Per Britain’s Oil and Gas Authority’s recent report, 5,500 jobs have been cut since late last year.
Though alarming, the result was not unexpected. North Sea houses some of the most mature basins in the world and companies operating in the region face high operating costs. Output has fallen to the lowest level since production began in the region in the mid-70s as resources from old fields have exhausted.
The near 55% plunge in Brent crude prices over the last year has added to the woes. Several operators from the region have announced cancellation of projects and/or jobs cuts to control the rising financial burden.
Energy Jobs Finding the Axe
BP plc BP began the year with announcements of 200 job cuts in the North Sea. The oil giant, which employs around 3,500 people in the North Sea, announced the move in response to ‘toughening market conditions.’
Earlier this year, Britain’s largest oil company Royal Dutch Shell plc RDS.A announced that it will reduce headcount by about 250 this year in the region to counter the impact of weak prices. This reflects a 10% cut in the U.K. North Sea workforce and follows 250 job cuts announced last year.
These announcements followed similar trends adopted by other Big Oil companies Chevron Corporation CVX and ConocoPhillips COP, late last year.
On Mar 18, 2015, Britain’s Chancellor of the Exchequer George Osborne announced tax cuts and allowances favorable to the industry, in response to the firms’ call for help. But these measures do not seem to have the desired results. In a June report, the confidence level of North Sea oil and gas contractors was reported to have fallen to a ‘record low.’
Production Woes Remain
Production from the U.K. Continental Shelf (UKCS) has seen a substantial decline. Per the recent report by Oil and Gas Authority this level is expected to fall further in the upcoming years.
Oil production from the region was about 39.7 million tons in 2014. Production projection indicate declines from 30–45 million tons in 2015 to 20–40 million tons in 2020.
Natural gas production from the region was 34.9 billion cubic meters (bcm) in 2014. Forecasts indicate production of 25–40 bcm in 2015, which is expected to gradually decline to 15–40 bcm in 2020.
Post 2020, both oil and gas production is expected to decline over 5% a year. With these steep declines in projections, the current job cuts may well be just the tip of the iceberg.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BP PLC (BP): Free Stock Analysis Report CHEVRON CORP (CVX): Free Stock Analysis Report CONOCOPHILLIPS (COP): Free Stock Analysis Report ROYAL DTCH SH-A (RDS.A): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
|
|
|
ConocoPhillips
|
|
|
CODE : COP |
ISIN : US20825C1045 |
|
| |
ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
ConocoPhillips is a producing company based in United states of america. ConocoPhillips is listed in Germany and in United States of America. Its market capitalisation is US$ 149.8 billions as of today (€ 131.2 billions). Its stock quote reached its lowest recent point on December 31, 1991 at US$ 10.94, and its highest recent level on March 28, 2024 at US$ 127.28. ConocoPhillips has 1 177 107 000 shares outstanding. |