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Texas Oilfield Jobs Could Hit 15-Year Low This Fall, Might Never Recover from Coronavirus Slowdown

Texas Oil and Gas Jobs Might Not Recover from Coronavirus Shutdown | Texas Oilfield Explosion Lawyer

Coronavirus shutdowns and the resulting economic fallout continue to take a toll on Texas’s vital energy industry, with one economist predicting oilfield jobs in the state will bottom out at around 150,000 this fall – the lowest number in 15 years.

Unfortunately, the employment picture may never fully recover, especially if the current rising rate of infections results in further shutdowns.

“I hope it doesn’t get worse, but if COVID sends us down, the number could be worse than that,” Karr Ingham, an economist with the Texas Alliance of Energy Producers, recently told The Houston Chronicle. “It’s difficult to imagine that oil and gas employment and the rig count will ever be as high as it was.”

Chevron and BP Among Texas Operators Announcing Layoffs

Drilling and oilfield service companies operating in Texas employed 162,350 workers in June, down from a peak of 297,100 in December 2014. Texas lost 46,100 industry jobs from February to June, as the global pandemic decimated worldwide energy demand.

Ingham’s dire predictions came just as ExxonMobil, the largest oil and gas producer in the United States, was reportedly mulling cuts to spending and jobs to protect its 8% shareholder dividend. While the company’s CEO had previously indicated no layoffs were planned, internal documents reviewed by The Chronicle showed ExxonMobil changed its employee review metrics in November. That led to an increase in the number of workers in the lowest performance category who now risk losing jobs.

Chevron recently announced layoffs affecting 7,000 workers, while BP said it would eliminate 10,000 jobs.

Industry-Wide Slowdown Began Even Before Pandemic

The industry was already facing a slowdown when the pandemic brought the energy market to the point of collapse. While the Permian Basin and other oil-producing regions across Texas had been booming since 2016, Wall Street investors had recently turned bearish due to years of underperformance, causing both rig counts and employment numbers to fall steadily throughout 2019.

The combination of the coronavirus pandemic and a brief price war between Saudi Arabia and Russia caused the price of oil to plummet earlier this year. In fact, futures for West Texas Crude briefly dove into negative territory for the first time in history.

In April, 2,500 Texas oil and gas jobs disappeared in just a 10 day-span. By July, the nation’s total rig count stood at just 251 compared to 946 during the same month last year.

Big Oil Companies Targeting Smaller Rivals for Acquisition

The growing financial pressure has forced the industry to turn to new technologies and greater efficiencies that will likely lead to even more job losses in the future.

Meanwhile, the sector’s biggest players have begun to target their smaller rivals, with Chevron announcing just last week that it would be acquiring Houston-based Noble Energy in an all-stock deal valued at $13 billion. Chevron has already indicated it would be eliminating redundant positions as part of the acquisition, and further consolidation of the industry will likely lead to similar job losses at other companies.

“Crazy economic events tend to kind of speed those up sometimes,” Ingham told the Chronicle. “I think the outcome of that will be that the number of companies gets smaller, and probably the number of overall employees goes down as well. That’s a shame because these are great, high-paying jobs.”

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