Oilfield Workers in Midland, Odessa and Across Permian Basin Face Layoffs as Coronavirus Slows Demand
The severe economic impacts of the coronavirus pandemic are being felt across the Permian Basin, where thousands of oilfield workers in Texas and New Mexico have already been laid off or are anxiously awaiting their pink slips.
Coronavirus and Price Wars Push Oil Towards $20 per Barrel
Falling demand and an ill-timed Saudi Arabia – Russia price war have oil hovering near $20 per barrel. Faced with cratering profits, energy companies are now shuttering wells and reducing refining capacity around the world.
The dire situation came into focus just last week, when Halliburton Co. – the largest provider of fracking services in the world – announced layoffs affecting 3,500 employees at its Houston, Texas office.
Apache Corp. has since cut 85 jobs at its offices in Midland, Texas, and its Permian Basin rig count has gone to zero. Meanwhile, FTS International Services has furloughed 35 workers in Fort Worth and another 85 in Hobbs, New Mexico.
Some Oil and Gas Companies Might Not Survive Downturn
According to Bloomberg News, oil and natural gas companies in the United States have already cut capital spending by $12.6 million, and it’s estimated that close to two-thirds of the $100 billion in global cuts will come from the Permian Basin.
While big companies like Schlumberger Ltd. and Baker Hughes Co. could see earnings drop by double digits this year and next, there’s growing fear that lesser players won’t be able to weather the downturn.
“There’s definitely blood in the water,” Dan Eberhart, chief executive officer of Denver-based Canary Co., told Bloomberg. “The weakest oil and gas companies, oilfield service companies and banks with heavy energy exposure might submerge beneath the waves before the end of the cycle never to surface again.”
40% of Midland-Odessa Workforce Relies on Oil and Natural Gas
The Midland-Odessa region in West Texas is especially vulnerable, as more than 40% of the area’s workforce relies on high-risk oil and natural gas industries for their livelihoods.
“You see everybody I’ve talked to, every single one of them, is talking about what they are going to do when it eventually comes out and their company goes out of business,” one worried oilfield worker told the Texas Standard.
The 22-year-old man dropped out of college and arrived in Odessa about three years ago to take advantage of the Permian Basin drilling boom. Right now, he’s making more than $80,000 a year monitoring poisonous H2S gas in the oilfields. But there’s no way of knowing when his job might disappear.
“I’m nervous. I’m scared,” he continued. “I know people that [already] got laid off and I feel like there’s going to be a whole lot more of that around this area.”
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Our Undefeated Oilfield Accident Lawyers are monitoring this unprecedented crisis, especially the consequences for Permian Basin workers in Texas and New Mexico, and will continue to post updates as the situation changes.
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