Schlumberger Layoffs have begun (Houston, Dallas: fit in, 2014, bankruptcy)

[RandomStorm]

This is the layoff data I've gathered from various articles. For global layoffs I've assumed 50% of the cuts to happen here in Houston, for others I assume ~10% attached to Houston jobs still. Might be waay off on Pemex though, but I don't know.

So what do you think, too high/too low? How high will Houston go?

[RandomStorm]

Originally Posted by hendersj31

I heard around 2% oversupply currently. I agree it doesn't seem like much to me. But getting all the oil that the US used to buy before the shale boom to new markets is apparently a big deal that will take some time, especially with lower demand. Additionally since Opec is not interested in reducing their market share any further, oversupply will be an issue until production slows. This will happen by cutbacks that we are already seeing, and what will likely be the closure of companies that cannot profit at current prices.

This is the way I see it anyway.

The former President of Shell Oil, John Hofmeister, says supply is outpacing demand by only 1 million barrels a day or so, and that he sees $5 /gallon gas prices on the horizon.

Former oil exec: $5-a-gallon gas on the way

[Rust Never Sleeps]

Originally Posted by AliefPropOwner

Copper is a recession indicator for entire global economy. Right now copper is flashing a bright and shinny red sign. So if anyone really believes the "downstream/east side Houston activity pickup" meme because of low crude price forget it.

Yep, "Dr. Copper"

[ipuck]

Originally Posted by mikeyyc

You have to take into effect the production curve of all the tight oil right now. It's not a bell curve for production, more like a ramp with a cliff at the end. Unless you're continually re-investing with new drilling, that production is not long-lived. Usually under a year per well.

For all the supply increase the last 5-6 years, price has still been in triple digits thanks to China. They are now slowing down along with the almost recession like economy in Europe.

All the slowdown in supply won't have as much effect as the slowdown in usage from China.

[Trae713]

Originally Posted by RandomStorm

Uhhhm, you're disregarding the effect City policies have on companies. The Woodlands are give ExxonMobil a 10-year tax-free break, so 10 years without city taxes = ExxonMobil moves to the Woodlands.

Cities use tax incentives to create industry clusters all the time. Common practice.

Ref, "Montgomery County commissioners decided to give the company 10 property-tax-free years in its new Woodlands space."
ExxonMobil Setting Up a Separate Second New Campus for Itself — in The Woodlands | Swamplot

The Exxon Mobil campus is not in The Woodlands. This is a common misconception people make about the campus. It is in Houston ETJ and will be annexed by the city at a later date..

[mikeyyc]

Originally Posted by ipuck

For all the supply increase the last 5-6 years, price has still been in triple digits thanks to China. They are now slowing down along with the almost recession like economy in Europe.

All the slowdown in supply won't have as much effect as the slowdown in usage from China.

agreed

[mikeyyc]

Originally Posted by Trae713

The Exxon Mobil campus is not in The Woodlands. This is a common misconception people make about the campus. It is in Houston ETJ and will be annexed by the city at a later date..

True, but it's still Montgomery County.

[elnina]

Another day, another unambiguously bad announcement from America's bettered energy sector which are bolting down ahead of the crude storm, and firing thousands.

http://www.zerohedge.com/news/2015-0...0-more-layoffs

[Jack Lance]

Originally Posted by mikeyyc

True, but it's still Montgomery County.

No it is not in Montgomery County. It is in Harris County !

[madrone2k]

I think people should try to be a bit more rational about this before jumping to conclusions that they are emotionally drawn to.

On side of "the sky is falling" folks: I don't think its reasonable to make assumptions like "half of Schlumberger's 9000 layoffs" will be in Houston, when the announcement of that was that it affected employees located in the eastern hemisphere.

On the side of "Houston is so diverse now, this cannot hurt us", I agree that a huge percentage (likely more than half) of the ports business is directly dependent on the O&G industry. The base of our economy that draws money here is largely O&G, and that funds a lot of the other economy in retail sales, home sales, etc. The TMC is a wonderful asset, but the amount of money it draws into our local economy from outside pales in comparison to what O&G draws.

In the 80s, we had similar discussions to this. But then, a funny thing happened. Oil prices recovered and we kinda forgot about the importance of diversification. Along the way, some of the big non-O&G companies based here disappeared (like Compaq, American General, Continental Airlines and ... well, even Enron, though I hate to bring that up. And yes, I know Enron started out as a gas pipeline company.)