100,000 jobs lost in U.S. oil and gas industry

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Houston ChronicleMore than 100,000 U.S. oil and gas jobs have been lost during the economic downturn brought on by the coronavirus pandemic, a new report shows.

Rystad Energy analyzed federal Bureau of Labor Statistic data and found that 44,550 jobs have been cut from oil-field service companies; 23,050 jobs  from oil and gas drilling and extraction companies; and 16,000 jobs from pipeline companies since the outbreak of the coronavirus in the U.S. in early February. The Norwegian energy research firm also found some 20,000 additional jobs in the oil and gas supply chain have been lost, bringing the total to more than 100,000.

The cuts can be attributed mainly to the nosediving oil prices driven by a sharp contraction in domestic oil demand, which has resulted in an unprecedented demand-supply imbalance. In response to the weakened demand, operators and service providers alike have been frantically cutting jobs,“ Matthew Fitzsimmons, Rystad Energy’s vice president of energy service research, said in a statement.

The job cuts have affectected the oil-field services sector the most. The number of oil-field support jobs has decreased by some 20 percent, and oil and gas related construction jobs have fallen by more than 10 percent, according to Rystad. Weatherford, for example  in April announced it would lay off 6,000 employees globally and Halliburton said it would shed more than 4,000 jobs.

Most of the energy job cuts have been focused in Texas, which is home to the Permian Basin and Eagle Ford shale, and hosts about half of the nation’s drilling rigs. The Lone Star State has lost more than 45,000 jobs in its upstream energy sector since February.

In addition, energy workers who remain on payrolls are facing deep pay cuts. Wages for various trades in the oil and gas industry are likely to decline by as much as 10 percent heading into 2021.

Even though crude prices have climbed back to near $40 a barrel, Rystad said it doesn’t expect hiring to resume quickly.

“While other industries have started to see labor demand embark on a road to recovery, oil and gas workers will have to wait longer for demand to increase,“ Fitzsimmons said.

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