Tuesday, May 28, 2024

Oil and gas industry reports record-breaking job losses in April

by BIZ Magazine

By Bethany Blankley | The Center Square

The oil and gas industry lost 26,300 jobs in April, the largest drop of industry jobs in a single month, according to job data dating to 1990.

Texas saw a record surge of more than 2 million claims for unemployment in roughly a six-week period after Gov. Greg Abbott’s executive order in March shut down businesses he deemed nonessential to prevent the spread of the coronavirus, and to tanking oil prices resulting from an oil war between Saudi Arabia and Russia. The economic fallout also sent commodity prices to historic lows.

According to new data released by the Texas Workforce Commission (TWC), drilling, completion, production and related sectors employed 192,600 people in Texas in April, a 12 percent drop from March figures.

The number of oil and gas jobs held in April is comparative to levels reported in November 2016.

The oil field service sector, which includes drilling rig operators, hydraulic fracturing crews and equipment manufacturers, was the hardest hit by the economic downturn. About 22,300 of the total oil and gas industry jobs lost in April came from this sector, according to TWC data.

Among them were workers from major oil and gas companies. Since January, Halliburton has laid off more than 1,900 people working in Texas; Midland-based ProPetro let go of more than 1,400 employees; Houston-based NexTier Oilfield Solutions laid off nearly 1,000 employees.

West Texas Intermediate, the U.S. benchmark for crude oil, plummeted to its lowest price on record, and the largest single day drop of more than 90 percent on April 20.

U.S. oil futures were also at their worst recorded level April 20 since NYMEX opened trading in oil futures in 1983.

To break even, companies need to hit $60 a barrel. Today, crude oil prices are at the $30 per barrel range. With profit losses, exploration and production companies have cut their budgets and staff and scaled back drilling and completion activities.

Abbott has said that the record job losses are directly tied to the shutdown and once restrictions are lifted and the state opens up beyond phase 2, these jobs will come back.

The Texas oil and gas industry endured 21 straight months of job losses in 2015 and 2016, the Texas Oil & Gas Association notes. Its president, Todd Staples, told the Houston Chronicle, “While many of these necessary reductions have negatively impacted workforce levels, the industry is poised to rebound as the world economy gets back on track and supply and demand levels normalize.”

According to multiple reports, U.S. Treasury Secretary Steven Mnuchin and Energy Secretary Dan Brouillette briefed the president on a plan to provide financial aid to oil drillers, however no such plan has come to fruition or been announced.

“The Texas oil and natural gas industry is no stranger to volatile swings and operators have proven themselves nimble and innovative in challenging times,” Staples wrote in a column published by the Waco Tribune-Herald. “We are fortunate in Texas to have the energy infrastructure in place to continue to responsibly produce, transport and refine oil and natural gas into the fuels, products and power that Texans need. As the nation’s leader in oil and natural gas production, pipeline miles and refining capacity, Texas is well equipped to continue meeting our energy and everyday needs.”

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