Crisis goes on

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Crisis in oil and gas industry goes on and thus energy firms keep on downsizing production instead of investing in drilling new wells. Interestingly, it is 10th week in a row when U.S. producers cut oil rigs. Drillers from Baker Hughes removed 13 rigs in the week ended Feb. 26, bringing the total rig count down to 400. That compares with 986 oil rigs operating in same week a year ago.

Eagle Ford might be another example of negative low crude price influence on making profit. So far this year, drillers have sidelined 29 rigs. Oil production from U.S. shale fields, including the Eagle Ford, is expected to keep dropping this year, which should take some pressure off of storage.

Sometimes downsizing production is not enough and cutting jobs is essential to survive on the market. Halliburton is about to lay off another 5000 workers which equals about 8 percent of its workforce.

Well, it is just business… Owners of oil companies are forced to make hard decisions in order to avoid a collapse. But surely this will not last forever when production is unprofitable for many.

Sources:

http://www.rigzone.com/news/oil_gas/a/143259/Baker_Hughes_US_Oil_Drillers_Cut_Rigs_For_10th_Week_In_A_Row

http://fuelfix.com/blog/2016/02/26/eagle-ford-rig-count-down-70-percent-in-the-last-year/

http://fuelfix.com/blog/2016/02/25/halliburton-cutting-5000-more-jobs-worldwide/#36089101=12

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