How bad has the oil glut hit the industry? Ask Halliburton

Those of you who follow politics more closely than the energy industry may only be familiar with Halliburton from their connection with Dick Cheney, but they’ve been a major player in the oil and gas market (among many other things) for a very long time. As you might expect, a sustained period of record oil production and relatively stagnating demand, leading to the lowest oil prices in recent history, hasn’t been great news for them. How bad has it been? Well, as FuelFix reports… pretty bad indeed.

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Oil field services giant Halliburton shed another 4,000 jobs in the final three months of 2015, as the Houston-based company continued to aggressively cut costs amid the worst oil crash in decades.

With the latest job cuts, Halliburton has reduced its global workforce by 25 percent, a total of about 22,000 employees since its peak in 2014. And more cuts could be on the way if a recovery in crude prices stalls, company executives said Monday morning.

“2016 is shaping up to be one tough slog through the mud and the industry is going to have to take it a quarter at a time,” CEO Dave Lesar said.

The company experienced a $28 million loss in the fourth quarter of 2015 which is particularly startling considering that they registered a more than $900M profit during the same period the year before. But they’re not the only ones feeling the pinch. As of last November we’d already seen approximately 250,000 layoffs across the country in the oil sector. Just before Christmas, Shell announced that they would be forced to shed 2,600 jobs in the first part of this year if the market didn’t improve. The pinch is hitting all across the board.

There’s no small measure of irony in the fact that you hear almost nothing from liberal, anti-energy activists about this story. They were busy all through the last election cycle insinuating that every new innovation or energy related project was all part of a grand scheme by “Big Oil” to get even more wealthy and take over the world. As it turns out, being too good at your job can have the opposite effect. The real tragedy to all of this turmoil is the job losses, though. We might have been able to avoid at least some of these effects if the Democrats hadn’t dragged their feet for so long on lifting the crude oil export ban, but at least we’re getting started on expanding our markets in that direction now. Also, we’ve needed expansions to our refining capacity for quite a while, but to say that the government has been less than supportive is a bit of an understatement.

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Still, this is the way the free market operates. The energy companies know this and they’ll climb back into the fight as the market allows. The only question is how long it will take.

CrudeOil

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