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TWO of the world’s largest oil field services companies. - 13-1-2009

TWO of the world’s largest oil field services companies last week announced job cuts, raising questions about whether other companies in the sector would do the same.

Schlumberger – the world's largest oil services company – confirmed last week that it was cutting about 5% of its United States workforce, or about 1000 jobs, and was seeking further cuts elsewhere.

A spokeswoman at the company's United Kingdom office told Times Online that Schlumberger was looking at the most effective ways of managing its resources in the current economic climate and acknowledged that job cuts were a possibility though she declined to comment on how many there would be.

Contractors as well as operating and support employees were among those whose jobs were lost in the US, Bloomberg reported.

Meanwhile, second-placed Halliburton also said it would be slashing jobs, but did not say how many or when.

The company added the ongoing financial crisis could make it challenging to meet revenue growth and other performance targets in 2009.

The moves by the two leading services companies have raised speculation that other contractors may make similar cuts.

However, Stern, Agee & Leach analyst Michael Henzi told Bloomberg he did not envisage a whole lot of vicious job cuts.

He said the contractors “don’t want to be caught without enough people” when oil prices rise, which he said would happen “pretty quickly” after production cuts by the Organisation of Petroleum Exporting Countries.

Dane Groeneveld, a recruitment specialist with executive recruiters Talent2, told it was possible that contractors such as Schlumberger and Halliburton would reduce staff on exploration rigs, as the industry as a whole focuses on production cash flow rather than spending on exploration programs.

However, he said staff might be increased in other areas, adding that Schlumberger had been winning some work in Queensland’s growing coal seam gas sector.

Further evidence for this came from Santos, which last week announced plans to hire 120 new employees for the Gladstone liquefied natural gas project in Queensland.

GLNG will use CSG as feedstock for an initial 3.5 million tonne per annum LNG plant on Curtis Island.

Crest Personnel consultant Adam Carabetta said global job cuts by Halliburton or Schlumberger could result in an increase in candidates applying for vacant positions with other oil and gas service companies.

“This will result in a more intense level of competition between candidates seeking employment and allow companies who were perhaps struggling to seek suitable candidates for hard to fill roles in the past much less difficulty in accessing them.”

A drop in the market rate of salaries linked to these jobs could also result.

However, Carabetta noted that as some of WA’s major oil and gas projects are LNG based, there should be little or no impact from any cuts in Perth

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