In spite of recent headwinds, the oil and gas industry has stayed resilient. Energy prices have dropped sharply, and many companies have responded to these pressures by leveraging cost management, laying off workers and curbing hiring.
While making these adjustments may prove difficult in the near term, doing so could help ensure these industry participants are even stronger, wrote Don Briggs, president of the Louisiana Oil and Gas Association.
Labor force challenges
There is certainly evidence that industry participants have been responding to the drop in oil prices, as firms involved in oil and gas extraction sector shed 1,900 positions in January, according to The Wall Street Journal. However, figures provided by the media outlet reveal that even after eliminating these jobs, this particular industry has more workers than it did in July.
While many market observers have voiced concerns that the financial performance of industry participants would suffer because of the recent decline in energy prices, job losses have been modest, the media outlet reported.
Demand for skilled workers
In addition, companies need workers with specific talents, Cindy Sanford, who manages the Williston office of the North Dakota Job Service, told Williston Herald. While the job service had close to 4,500 positions before oil prices suffered their sharp drop, the organization still had more than 1,900 listings at the time of report. This figure represents 40 percent of the total jobs available, Sanford estimates.
She maintained that while companies are laying off workers, the region still holds jobs, the news source reported. Sanford is not the only one staying positive about business conditions in the area, as officials in both the western North Dakota oil patch and also northwestern South Dakota contend that the energy industry is sturdy and will survive the recent downturn.
‘Land of opportunity’
It seems some businesses still believe the region holds promise, as Sanford said North Dakota’s oil boom keeps attracting companies, according to The Associated Press. One firm, which registered to do business in the Beaver State in January, told her that “this is still the land of opportunity.”
“We’re coming up, we’ll be here in November, and we need 35 people,” the business added, the media outlet reported.
This company is not alone in its optimism, as Bob Sieve, manager of the Belle Fourche location of manufacturer Permian Tank, said his company plans to double the size of its location even though it was recently forced to lay off seven employees, according to the news source. In addition, Permian Tank intends to eventually add more workers.
Broader difficulties
While business conditions may seem strong in North Dakota, and many industry participants there remain upbeat, not everyone is so optimistic, according to The Wall Street Journal. Major oil field servicers have announced layoffs that will result in the companies shedding 20,000 jobs during the first quarter of 2015, predicted Bricklin Dwyer, who works for BNP Paribas as a senior U.S. economist.
In addition, the number of job queries for oil-related positions at Indeed.com has plunged, which suggests jobseekers realize that now is not an optimal time to look for employment in this particular industry, the media outlet reported.
While these challenges may seem daunting, Briggs emphasized that energy companies will continue to drill for natural resources and offer quality services. He noted that downturns eventually give way to recoveries, and the crude oil market will correct itself at some point. Many resilient people work in the oil and gas industry, and the sector can only see improvement when its individual firms seek greater efficiency.
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