Oil Pay cuts.

[tut]

I have only ever had one interview for a real job, twas as a salesman for Buxted Chickens when I was eighteen. Had to borrow a de-mob suit from a 50 year old Uncle. First question was why I wanted the job, answer was because you give me a car and the pay and expenses are good.

Not sure why, but I did not get the job.

tut

[Danny T30TUS]

Tut, did you ask how much holidays you were entitled to?

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[Mikie711]

Today was a bad day, another 37% pay cut. Now down about 54% from 2 years ago.

[neil]

Ouch! Hopefully things pick up soon

[tut]

That was going to be my next question Danny, also what my expenses would be.

tut

[robin]

Today was a bad day, another 37% pay cut. Now down about 54% from 2 years ago.

Ouch!

[C7Steve]

Today was a bad day, another 37% pay cut. Now down about 54% from 2 years ago.

Sorry to hear this Mike.


Steve.

[j2 lot]

Hope things pick up for all involved in the industry

[Mikie711]

The ironic thing for us is that nothing has changed. The rig day rate is down a bit, has been for nearly a year, but we are still drilling and still have a happy client. I think they are cutting now because they can and it maximises the return on the investment in buying the rigs. Quarter 1 profits will be peachy despite loosing a couple of contracts.

[C7Steve]

Hope things pick up for all involved in the industry

I was out cycling with a guy tonight and his company have forecasted not until the end of 2017 before things hopefully get better.


Steve.

[neil]

Hope things pick up for all involved in the industry

I was out cycling with a guy tonight and his company have forecasted not until the end of 2017 before things hopefully get better.


Steve.

I bet the same company didn't predict the drop so I'd take any prediction now with a pinch of salt

[pshanks76]

Unfortunately I doubt it will get much better until next year, unless someone decides to start a war (hope not!) with everyone slashing capex budgets... although I'm sure many will still find cash to make some prudent acquisitions when values are low. Here's hoping for a brighter 2017!

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[campbell]

Very ouch, Mike.

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[mxvx]

The ironic thing for us is that nothing has changed. The rig day rate is down a bit, has been for nearly a year, but we are still drilling and still have a happy client. I think they are cutting now because they can and it maximises the return on the investment in buying the rigs. Quarter 1 profits will be peachy despite loosing a couple of contracts.

Sorry to hear that Mike. Are you contracting/day rate or staff?

Regardless, management / HR are very much skating on ice at the minute between ‘dropping rates/salaries and treating people worse because they can and there is little option for people’ V’s treating the good people will in hope they retain them when they need them more. The potential knock on effect in the future of losing people’s loyalty and starting from scratch in terms of company standards seems not though thought out or that it doesn’t really matter right now. People / teams are the success of companies / rig’s and if you cut corners too much people are not going to be happy at work. i.e. avoiding replacing mattress, reducing food budgets, travel to and from rig allowance.

It was only a couple of years ago where companies were paying out retention bonus to keep the people as they were losing folk left right and centre now when the price way high… IADC/OGP’s committees agree it’s important not to have a knee-jerk response like the 90’s but that seems to be creeping in now as they prepare for ‘lower for longer’. As you say, it’s not like they’re not making any money either, there’s plenty being made.

[kerryxeg]

Nothing radical here, but my view of the current situation.

There are different issues for companies dependent on whether they are an operator a service company or a rig contractor. The operators have committed cash on projects around the world and now don't have the cash expected so have no option to cut where they can, which results in delay or cancelation to projects, and limited investment in existing assets. The knock on effect is to the service companies who have less work and have to compete aggressively for what is available.

There will be projects in the future, but the current commitments have to be cleared first, so recovery will be slow over the next 3 years. The oil industry suffers from significant cycle lag which unfortunately results in extreme highs and lows, this is nothing new, but the previous high was driven by very expensive deepwater development and high oil price and is making the resulting low more significant than previous.

Some companies who have longer term contracts will be better placed to ride the storm, but they are already having to consider how they compete when these contracts end and will be marketing their service for work in 2018. It's also very likely that some companies will not survive, and this is the reality of some of the difficult decisions which have to be made.