The future of oil and gas on the world stage ! (Houston: tax credit, live)

[still_waiting]

Guys the super majors are still out here recruiting at top universities. When I asked about the situation I was told something different from the speculation that's been going around. If the bottom was truly falling out then I'm sure the recruiters would not still be out. There's still a relatively aging workforce that needs to eventually be replaced and bringing in the newbies provides concurrence and continuity.

[still_waiting]

Originally Posted by 0825spring

Still Waiting, you're young and haven't been through the rough times in the O&G business, right? I have and it's not fun. I've had to run the numbers on how many people need to be let go when a major project gets cancelled. Then watch Team members make the long walk to the Dept Mgrs office to get their pink slips. Afterwards I immediately get on the phone to call my own global contacts...thank God for them, no burnt bridges and a good reputation.

What you are reading is not necessarily gloom and doom pessimism....just a dose of reality learned the hard way. It's a boom or bust industry. Make and save the big bucks while you can and always have a back up plan in place. There's little security or loyalty left. At the same time, I can't imagine doing anything else.

I'm young but somewhat experienced, I've survived the whole Fed Gov't fiasco when I worked in DC, talk about Chicken Little haha.

What I'm saying is that most factors are out of most people's control, and panic and paranoia is probably the worst way to deal with things. If it happens it happens, oh well we'll just have to adjust and move on if the ax swings.

It just seems like there are outsiders who almost wish that this would happen.

[heyjebbo]

For what it's worth re: super majors, hiring needs to remain on track independent of the ups and downs of this week's oil prices. Those employees will be with the companies for many years.

I'd expect the price of oil to impact project economics for future exploration, development and production. And those projects will take years to come to market. For companies with shakier financial positions, there's more impact on ongoing projects.

Also remember there is more than the upstream. Refiners and chemical companies are getting cheaper feedstocks.

Net negative, no doubt (as reflected in stock prices). But wouldn't confuse highly-leveraged upstream exploration with cash-rich integrated supermajors. The real question, I think, is what is the "right" future value of a barrel of oil, if Saudi Arabia doesn't want to yield significant market share to NA shale?

[14Bricks]

Originally Posted by still_waiting

Guys the super majors are still out here recruiting at top universities. When I asked about the situation I was told something different from the speculation that's been going around. If the bottom was truly falling out then I'm sure the recruiters would not still be out. There's still a relatively aging workforce that needs to eventually be replaced and bringing in the newbies provides concurrence and continuity.

I think that's the only thing young people coming out of college have forward to look to, all those aging baby boomers are going to be retiring soon, and have to be replaced,(although with people living longer, people might have to start working longer to reach retirement age.) if not they would be SOL.

[still_waiting]

Originally Posted by heyjebbo

For what it's worth re: super majors, hiring needs to remain on track independent of the ups and downs of this week's oil prices. Those employees will be with the companies for many years.

I'd expect the price of oil to impact project economics for future exploration, development and production. And those projects will take years to come to market. For companies with shakier financial positions, there's more impact on ongoing projects.

Also remember there is more than the upstream. Refiners and chemical companies are getting cheaper feedstocks.

Net negative, no doubt (as reflected in stock prices). But wouldn't confuse highly-leveraged upstream exploration with cash-rich integrated supermajors. The real question, I think, is what is the "right" future value of a barrel of oil, if Saudi Arabia doesn't want to yield significant market share to NA shale?

Thank you for your very insightful statements. That's more of what I expect, it's realistic without being so negative.

[still_waiting]

Originally Posted by 14Bricks

I think that's the only thing young people coming out of college have forward to look to, all those aging baby boomers are going to be retiring soon, and have to be replaced,(although with people living longer, people might have to start working longer to reach retirement age.) if not they would be SOL.

There still has to be concurrence though...meaning the newbs working alongside the older workforce so that the transfer of knowledge and mentorship can take place. This happens in the Gov't as well. Human capital must be invested in even during the lean times, even though these "lean" times will not be forever. Anything other way would be irresponsible for companies like the supermajors.

[chris_ut]

Originally Posted by Dopo

Don't get your point
those state run oil monopolies were producing oil just fine when oil was around $15-20 in the 90s.

Is that adjusted for inflation? $20 from 1990 adjusted is now $36.

Regardless the major factors are.

1. Population increase:

Population of Saudi Arabia in 1990: 16.2 million

Population of Saudi Arabia in 2013: 28.8 million


2. Cost of extraction. You always produce the cheapest oil first so as time goes n your cost to pump a barrel goes higher and higher.

[chris_ut]

Of course the super-majors are still going to college job fairs, they have long time horizons and would be unlikely to reduce staff for a 30% fall in oil prices. The guys who take the brunt up front are the service company people. If you look at the article I linked earlier in the thread permits for new wells are down 50% in Texas, that means rigs are being dropped. Each rig has a whole slew of service personnel attached to it. If those rigs aren't running all those guys are going home. If you're the company guy who was overseeing three rigs maybe now your just overseeing one but your not laid off yet. Maybe you had asked for another admin to help with all that paperwork and now that job posting is yanked. Its not the end of the world its just a slow down and there will be some lost jobs and a lack of growth in some new jobs.

[still_waiting]

Originally Posted by chris_ut

Of course the super-majors are still going to college job fairs, they have long time horizons and would be unlikely to reduce staff for a 30% fall in oil prices. The guys who take the brunt up front are the service company people. If you look at the article I linked earlier in the thread permits for new wells are down 50% in Texas, that means rigs are being dropped. Each rig has a whole slew of service personnel attached to it. If those rigs aren't running all those guys are going home. If you're the company guy who was overseeing three rigs maybe now your just overseeing one but your not laid off yet. Maybe you had asked for another admin to help with all that paperwork and now that job posting is yanked. Its not the end of the world its just a slow down and there will be some lost jobs and a lack of growth in some new jobs.

Understood Sir.

[Jack Lance]

Originally Posted by Dopo

Don't get your point
those state run oil monopolies were producing oil just fine when oil was around $15-20 in the 90s.

They have greater expenditures now than they did in the 90's. They basically pay people to be Saudi's . Without getting into a social debate as to the wisdom of cradle to grave government subsidies lets just look strictly at the math. Several sources not just CNBC place the break even point of what it takes the Saudi's to balance their Government budget is anywhere from $93 to $99 a bbl. This number includes not only their cost of production but their total cost of government which is funded almost strictly by oil revenues. So to balance their national budget they need to sell their oil somewhere in the 90's per barrel. Anything less and they are running a deficit and are in effect subsidizing their oil production with revenues from their rainy day fund that seems to be somewhere around 750 billion.

My point is how long will that fund last, and how deep into that fund are they willing to go ?