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Oil and Gas Sector Sheds Nearly 100,000 Jobs Amid Coronavirus Pandemic

Coronavirus Claims Almost 100,000 Oilfield Jobs | Louisiana Oilfield Accident Lawyer
Texas Wells in the Permian being Drilled and Fracked

Oil and natural gas workers in Texas and throughout the United States are losing jobs at a record pace, as the coronavirus pandemic continues to lower demand for energy around the world.

According to The Houston Chronicle, U.S. oilfield service companies laid off an additional 9,300 workers in July, bringing the total number of jobs lost since the beginning of 2020 to 99,253. That represents about $12.7 billion in annual wages.

Employment in the service sector is down more than 118,000 jobs since July 2019 and is now at its lowest point since March 2017.

Texas Down 59,200 Oilfield Jobs Since January

The Lone Star State has seen the most layoffs, as oilfield service companies have issued pink slips to 59,200 workers since January. Colorado was a distant second, with 10,200 layoffs so far this year. At least one analyst has predicted Texas oilfield jobs will hit a 15-year low by the fall.

Meanwhile, the nation’s rig count hit an all-time low last week, with oil and gas companies operating just 247 rigs across the United States. The count included 176 oil rigs, 69 gas rigs, and two maintenance rigs.

The number of operating rigs in Texas held steady at 104, down from 455 just a year ago. The Permian Basin, which runs from West Texas into Southeast New Mexico, had 122 rigs in operation, while the Eagle Ford shale in South Texas had 11.

U.S. Rig Count Down 60% in the wake of COVID-19 Lockdowns

According to the Chronicle, the country’s rig count has fallen more than 60% since mid-March, when rising coronavirus cases forced most of the nation into lockdown. Last week’s count was well below the bottom hit during the previous oil bust, when the total number of rigs operating in the United States fell to 404 in May 2016.

Unfortunately, the energy sector is unlikely to recover anytime soon.

Low prices have made it all but impossible for drillers to turn a profit, so many have stopped drilling for new discoveries.  In fact, both Exxon Mobil Corp. and Chevron Corp. recently warned they would likely wipe billions of barrels of reserves from their books.

Oil and Gas Sector Recovery Could Take Years

“The industry is in big trouble,” Ramanan Krishnamoorti, a professor at the University of Houston Department of Chemical and Biomolecular Engineering, recently told ABC-13. “You’re going to see a lot of bankruptcies, a lot of furloughs, more than furloughs. You’re going to see layoffs. You’re going to see people leave this entire industry because there aren’t going to be jobs.”

Krishnamoorti also predicted the big players would continue to absorb smaller operators, as Chevron recently acquired Noble Energy.

While the situation will eventually improve, it’s likely to take years.

“Looking three years down the road, I think this industry is going to rebound like never before,” he added. “But we’re going to go through a lot of pain before we get to that.”

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