ENERGY UPDATE


headlines surfacing almost daily. Though definitive figures are hard to come by, a well-sourced list published by Forbes in March put the US count at 74,000 across oilfield services (which took the brunt at 58,586), exploration and production (8,362) and related manufacturing (7,171). Graves & Co, a Houston energy


consultancy, said that nearly 50,000 jobs were lost in the three months to the end of July, adding to the 100,000 layoffs it had already estimated since the oil price started to slump. Fracking companies, in particular,


have been hit hard by the low oil price. “This recent dip in price has caused some of the fracking companies to pull back. Their suppliers are suffering, but the straightforward drillers are as well,” David Hargreaves, a private mining and energy consultant, told Re:locate. While fracking operations are still going ahead, they’ve slowed down. In many cases, it’s the exploratory


arms of businesses that are getting hurt as firms focus on their core business. “What we are seeing now is that the two areas most affected are exploration, then production,” Matt Spinolo, executive VP of Cartus Corporation, told Re:locate. Other aspects of the sector have remained more insulated,


however. “Beyond that, to date, we’ve seen little impact to refining, distribution and retail,” he added. “Across the industry, we are seeing smaller companies


being hit the hardest, but the entire industry has experienced significant reductions in exploration and production, particularly in higher-cost fields. All these factors will continue to affect relocation activity in this business segment,” Mr Spinolo said. Layoffs had begun with blue-collar jobs such as drilling


site operators, fracking crews, and workers at equipment manufacturers, but the cuts are beginning to extend to more highly-skilled roles, such as geoscientists. Firms are more reluctant to let such workers go, however.


The industry still remembers the oil crash of the mid-1980s, when so many highly-skilled workers were let go that it left a talent gap with effects that were still being felt 20 years on.


Canada and the Arctic Despite the pressure on exploration budgets, activity


continues. Shell recently received final approval from the US to begin exploratory Arctic drilling off the coast of Alaska. It might seem counter-intuitive, but David Hargreaves notes,


“It [Shell] has got to maintain that geographical presence around the world. And it always has the hope that we’ll get back above the price of $100 per barrel. They’ve got to keep it in their portfolio.” Canada is also feeling the pinch on the jobs front. A report


from the Petroleum Labour Market Information (PetroLMI) division of Enform, a safety association working in upstream oil and gas in Canada, predicted in May that some 185,000 direct and indirect jobs would be lost in Canada this year owing


to the oil price drop. It forecast that oil and gas engineering construction firms would be hardest hit, with losses of 75,000 jobs, followed by the support services sector, which would lose 26,000 jobs. PetroLMI said that the oil and gas industry spent more


than $125 billion on exploration, development and production activities in Canada in 2014, supporting more than 720,000 direct and indirect jobs, but that the figure for 2015 was expected to fall by $31 billion. The bulk of the impact would be felt in in capital expenditures on exploration and development, expected to decrease $28 billion. Two-thirds of those jobs are expected to be lost in Alberta,


location of the oil sands, with 20,000 losses estimated for British Columbia, and 14,000 for Ontario. The Canadian Association of Petroleum Producers said


in August that 35,000 jobs had already been lost in Alberta thanks to the price slump, including 25,000 in oil services and a further 10,000 in exploration and production. Some analysts have said there’s likely to be worse to come in September, October and November. Regions such as the Montney Play in British Columbia (BC)


and a recent find in the remote Northwest Territories (NWT) still attract enthusiastic headlines, however. The Montney basin is viewed as the anchor of a future


West Coast liquefied natural gas industry. Canada’s National Energy Board (NEB) reports reserves of 449 trillion cubic feet of natural gas, 14.5 billion barrels of natural gas liquids, and 1.12 billion barrels of oil in the formation. Production in the region is forecast to climb to six billion cubic feet per day by 2020, while production across the rest of Canada is forecast to decline by 15 per cent over the same period. The Montney


22 | Re:locate | Autumn 2015


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60