More evidence points to slump in the ‘Oil and Gas’ industry

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With the price of crude continuing to fall and now below $40/barrel U.S., comes confirmation from the Ministry of Natural Gas Development, of B.C.’s worst calendar year bonus bids total in natural gas and petroleum rights sales in more than three decades.

Wednesday’s December sale total tender bonus was $4.2 million and left the 2015 twelve month total at $18.3 million.

That’s the lowest calendar year total since 1982 when the 12 month post was 16.7 million, and it’s less than five per cent of last year’s total of 382.7 million.

Continuing with the same theme, the Petroleum Labour Market Information Division of Enform says a recent survey of 36 oil and gas companies, representing between 63,000 and 83,000 workers across the country found almost 60 per cent of the respondents said they were reducing their workforce.

The 2015 industry snapshot also found almost half saying layoffs had impacted between 11 and 25 per cent of their employees, and 50 per cent said they expect further layoffs and/or cuts to projects in the next six months, if oil prices don’t rebound any time soon.

Thus, heading into 2016, cost reduction is still top of mind for most companies, with over 85 per cent responding that cost management strategies were among their top three strategies to address workforce challenges in the near future.

However, Enform’s Carol Howes — while acknowledging it’s important to focus on the short-term human resources issues and solutions — also argues it is equally important not to lose sight of the resiliency of the industry and the longer term labor and skills shortages, which will return once prices do improve over the next few years, and baby boomers retire.