What did you do the summer before grad school ?

[watsondoodle]

Did you make the legendary 80, 000 dollar a month salaries I keep hearing about on the rigs ? Plus I read that shumberger laid off 7, 000 workers this year :/

It was even better, around 6 figures, but i worked during the height of the fracking revolution. I worked on wildcat wells which usually had really good field bonuses.  I got out right before the layoffs, but I hear all the big companies are letting people go. Hopefully oil recovers in the next few years for employment sake.

Edited March 11, 2015 by watsondoodle

[columbia09]

It was even better, around 6 figures, but i worked during the height of the fracking revolution. I worked on wildcat wells which usually had really good field bonuses. I got out right before the layoffs, but I hear all the big companies are letting people go. Hopefully oil recovers in the next few years for employment sake.

Aw I hope so too. Why did prices tumble for in the first place ?

[JasonTuzo]

Aw I hope so too. Why did prices tumble for in the first place ?

 

So in past years, OPEC had the role as being the swing producer for oil.  That meant that they would vary their production rates to influence the price of oil (e.g., drop production to prevent oil prices from dropping).  However, with the boom in shale oil production in the US, they were losing market share when doing this.  Therefore, OPEC decided that they will no longer be the swing producer and let the market decide what the price of oil should be.  They can keep their marketshare this way because they can produce oil much cheaper than the US shale producers can.  So with OPEC no longer dropping production to prop up oil prices and with slower economic growth from countries like China, oil prices tumbled (rising supply vs. lower demand).  For some perspective on oil price on the US producers, the breakeven price in the Permian basin is somewhere around $60 (depending on the operator).

 

With regards to the job market, what you will see, and already have to a certain extent, is that the service companies are the first to feel the affect of the price of oil.  So companies like Schlumberger, Halliburton, and Baker Hughes will be the first to lay people off.  Then the smaller operators will be the next ones to the layoff game because they are much more reliant on the price of oil to keep their balance sheets afloat.  The last to do layoffs will be the major operators like Chevron and Shell because they are fully integrated companies so a drop in the oil price can be (somewhat) absorbed by the better margins on the downstream side.  Of course, BP is an exception here because they have their own set of problems.  And Exxon is special and just does their own thing.

Edited March 11, 2015 by JasonTuzo

[columbia09]

Looks like I won't be able to get an internship this summer :/

[columbia09]

So in past years, OPEC had the role as being the swing producer for oil. That meant that they would vary their production rates to influence the price of oil (e.g., drop production to prevent oil prices from dropping). However, with the boom in shale oil production in the US, they were losing market share when doing this. Therefore, OPEC decided that they will no longer be the swing producer and let the market decide what the price of oil should be. They can keep their marketshare this way because they can produce oil much cheaper than the US shale producers can. So with OPEC no longer dropping production to prop up oil prices and with slower economic growth from countries like China, oil prices tumbled (rising supply vs. lower demand). For some perspective on oil price on the US producers, the breakeven price in the Permian basin is somewhere around $60 (depending on the operator).

With regards to the job market, what you will see, and already have to a certain extent, is that the service companies are the first to feel the affect of the price of oil. So companies like Schlumberger, Halliburton, and Baker Hughes will be the first to lay people off. Then the smaller operators will be the next ones to the layoff game because they are much more reliant on the price of oil to keep their balance sheets afloat. The last to do layoffs will be the major operators like Chevron and Shell because they are fully integrated companies so a drop in the oil price can be (somewhat) absorbed by the better margins on the downstream side. Of course, BP is an exception here because they have their own set of problems. And Exxon is special and just does their own thing.

Exxon is the company in aiming to work for eventually