The collapse in oil demand and prices spurred the fastest rate of oil- and chemical-industry layoffs in history.
This is not business as usual. With the second pandemic wave around the corner and a significant drop in global capital spending, big oil is on a job-cutting spree.
Job losses in the Canadian natural resources sector hit an all-time high in the second quarter of 2020. Currently, it stands at 43,000.
Pipeline giant TC Energy eliminated an unspecified number of jobs in its Canadian gas operations a couple of weeks back. Suncor Energy is set to cut up to 15 per cent of its workforce – almost 2,000 positions across the country – over the next 18 months.
Citing Statistics Canada, CBC reports that employment in the industry has fallen by 7.3 per cent during the second quarter of the year.
Saudi Aramco, the world’s most integrated oil company, has been laying off hundreds of employees, Reuters reported in June. In June, BP also announced it was cutting around 10,000 jobs from its workforce to cope with the low crude oil demand.
U.S. super-major ExxonMobil is cutting 1,600 jobs in Europe. “The impact of COVID-19 on the demand for ExxonMobil’s products has increased the urgency of the ongoing efficiency work,” the company said.
ExxonMobil swung into a loss in the first quarter of the year and then booked another loss for the second quarter. It now expects to post a negative net result for the third quarter as well.
As part of its efforts, it has been seriously reducing its presence in Europe’s oil and gas sector, Irina Slav wrote in a piece in Oilprice.com. After exiting Norway, Exxon put up for sale its North Sea assets. According to reports, Exxon will sell stakes in 15 fields. Two exploration blocks and Exxon’s stakes in pipeline networks in the region are on the table.
The week before, Royal Dutch Shell announced plans to cut 7,000 to 9,000 jobs worldwide by the end of 2022. It said around 1,500 employees have already agreed to take voluntary redundancy this year.
Almost three-quarters of the pandemic-driven jobs losses in the U.S. petroleum and chemical sectors may not come back before the end of 2021, Bloomberg reported, quoting a Deloitte LLP report.
The collapse in oil demand and prices spurred the fastest rate of oil- and chemical-industry layoffs in history, with about 107,000 jobs eliminated between March and August, Deloitte reported last week. The number is probably even higher when furloughs and other headcount measures are considered, said Duane Dickson, vice-chairman and U.S. oil, gas and chemicals leader for Deloitte.
The report added that oil explorers, gas drillers, frackers, refiners and equipment makers have shrunk their workforces to cope with the plunge in demand. Schlumberger, Halliburton Co. and Marathon Petroleum Corp. – some of the biggest operators in their fields – are among the companies casting thousands of people out of work.
Oilfield services have been hit particularly hard, as capital expenditure on things like the drilling of new wells has been slashed all around.
The U.S. Petroleum Equipment & Services Association (PESA) is reporting job losses touching the 103,420 mark in August, with oilfield services employment down more than 121,000 jobs since August 2019 and at its lowest point since March 2017. Texas has been the most affected, with 59,200 oilfield service jobs lost since the pandemic began.
A crisis is enveloping the industry.
Toronto-based Rashid Husain Syed is a respected energy and political analyst. The Middle East is his area of focus. As well as writing for major local and global newspapers, Rashid is also a regular speaker at major international conferences. He has been asked to provide his perspective on global energy issues by both the Department of Energy in Washington and the International Energy Agency in Paris.
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