Saudi Cabinet to hold special budget session on Tuesday    King Salman orders extension of Citizen's Account Program and additional support for a full year    Al-Falih: 1,238 foreign investors obtain premium residency in Saudi Arabia    Irish PM apologizes for walking away from care worker    Several dead as Storm Bert wreaks havoc across Britain    Most decorated Australian Olympian McKeon retires    Adele doesn't know when she'll perform again after tearful Vegas goodbye    'Pregnant' for 15 months: Inside the 'miracle' pregnancy scam    Ukraine losing ground in Russia's Kursk region, says military source    Hezbollah fires rocket barrages into Israel after deadly Beirut strikes    Al Ittihad claims top spot in Saudi Pro League after victory over Al Fateh    Do cigarettes belong in a museum?    Saudi Arabia joins international partnership initiative to boost hydrogen economy    Saudi delegation participates in the 7th U20 Deans Summit in Brazil    Riyadh Emir inaugurates International Conference on Conjoined Twins in Riyadh    Saudi Arabia to host 28th Annual World Investment Conference in Riyadh    Saudi Arabia allows licensed flour milling companies to export flour    Al Khaleej stuns Al Hilal with 3-2 victory, ending 57-match unbeaten run    Al Khaleej qualifies for Asian Men's Club League Handball Championship final    Katy Perry v Katie Perry: Singer wins right to use name in Australia    Order vs. Morality: Lessons from New York's 1977 Blackout    India puts blockbuster Pakistani film on hold    The Vikings and the Islamic world    Filipino pilgrim's incredible evolution from an enemy of Islam to its staunch advocate    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Over 100,000 oil and gas jobs lost in US, wages seen falling in 2021
Published in The Saudi Gazette on 12 - 06 - 2020

The US oil and gas labor market is amongst the world's most severely hit by the downturn that the COVID-19 pandemic has brought, a Rystad Energy analysis of the latest data from the US Bureau of Labor Statistics (US BLS) reveals. More than 100,000 oil and gas jobs have already been lost in total, with most of them coming from the support activities market.
The data shows that the four oil and gas segments most affected are support activities for oil and gas operations (44,550 jobs cut from a pre-COVID-19 level of 233,550), pipeline and gas and related construction (16,000 jobs cut from 227,000), drilling of oil and gas wells (13,450 jobs cut from 79,450) and oil and gas extraction (9,600 jobs cut from 156,600).
In addition to the above four segments from the US BLS, Rystad Energy has included more components of the oil and gas industry chain, thus independently estimating the total job cuts to exceed 100,000 to date. The support activities segment in particular reveals a staggering employment slump of 20% compared to February's pre-Covid-19 levels.
"The job cuts can be attributed mainly to the nose-diving oil prices driven by a sharp contraction in domestic oil demand, which has resulted in an unprecedented demand-supply imbalance. In response to the weakened demand, operators and service providers alike have been frantically cutting jobs," said Rystad Energy's Vice President Energy Service Research Matthew Fitzsimmons.
Heavy construction labor demand in the US increased by 3.4% in May, but the oil and gas industry did not contribute to this increase. Since the outbreak of the pandemic in the US in early February, oil and gas construction jobs have decreased by more than 10%. We believe this sector within the oil and gas industry will take a more cautious approach to new construction activity, waiting for the safety risks associated with Covid-19 to recede.
While onshore construction workers can social distance and execute their tasks on duty, issues arise during tool-box talks, mid-morning, lunch, and mid-afternoon breaks. Spreading out the times for breaks and installing additional breakout trailers to minimize the risk from these situations can result in increased indirect costs.
In addition to battling the safety risks with ongoing work, various large operators are now delaying or pulling out of new facility construction. In Louisiana alone, more than 40% of liquefied natural gas (LNG) investments scheduled for this year have been postponed or canceled.
A revival in construction labor demand may take some time as delays mean weather windows for construction will be missed. In addition, the weak financial stability of service companies may leave them unable to ramp up hiring fast when conditions improve.
Job cuts aside, the ongoing downturn will also manifest itself in the form of deep pay cuts. According to our estimates, the wages for various trades in the oil and gas industry are likely to witness a decline of at least 8% to 10% heading into 2021.
The decline in wages and steep job cuts may see workers migrate to other industries with overlapping skill requirements, while some senior workers may retire altogether, as we saw in the previous downturn.
Combined with social distancing measures, severe restrictions on international travel and stringent immigration audits, this will adversely impact the hiring of labor once prices and demand stabilize.
Some parts of the US have been affected more than others. Texas has lost more than 45,000 jobs in its upstream sector since February 2020. Similarly, Louisiana will likely see a decline of nearly 25% in its total oil and gas workforce, according to the Louisiana Oil and Gas Association.
"Overall, the impact of the job cuts would be greater for the oilfield services (OFS) sector than for exploration and production companies. OFS companies are likely to see more than 20% of its shale, onshore and offshore workforce combined cut by the downturn.
"While other industries have started to see labor demand embark on a road to recovery, oil and gas workers will have to wait longer for demand to increase," Fitzsimmons said. — Rystad Energy


Clic here to read the story from its source.