Reasons for oil states and provinces to be as competitive as possible.  (Statistics today from our Aussie O&G energy analyst friend)

  • Late last week US independent Southwestern Energy laid off 1,100 staff members – or an incredible 40% of its staff

  • A similar story is being played out with Canadian focused Husky Energy, who is said to be planning a 30% staff reduction in the next few weeks.

  • Oil services giant Schlumberger announced a 15,000 personnel reduction last week.  

  • Also as we noted last week, Shell is to reduce its staff (post the BG acquisition) by 10,000.

  • Anecdotally, the total work-force reduction in the Canadian province of Alberta is said to be touching 100,000.

  • And very anecdotally – my Aberdeen based and/or trained Facebook friends are much more nervous about job cuts in 2016 than they were in 2015.

  • As we have stated before, we think the World is effectively placing an awful lot of faith in the increasingly fewer remaining members of the oil and gas industry to deliver new supply once the tiny (in our view) current spare capacity is eroded by demand gains and depletion.

​​Conclusion:

1) The last thing lawmakers should do in a low price environment is raise taxes and regulatory costs of exploration, production, transportation and refining activities; and, 2) when price recovery occurs, activity will logically begin to grow first in low cost/high return areas.  -dh​