Ancedotal

[youfoolishboy]

http://oilpro.com/q/3863/recruiting-pic ... icle_4_txt

An interesting thread that backs up a lot of comments here. Read the comments below the small post it indicates work picking up mainly in the field not design and it appears mainly North America & Middle East so suggests production growth in North America. I do worry that this oil price rise maybe only temporary unless there are more cuts by OPEC to accommodate the N. Americans.

[youfoolishboy]

Hmmm, mainly wishful thinking I reckon. As far as I can see, this remains the deepest and longest O&G market turn down in more than 30 years. I hope I'm wrong though.

Jobs are there its a recruiters website. They are operations jobs though so early days in the recovery.

[youfoolishboy]

The replies are not from recruiters but from people reporting more demand backing up the recruiter's story.

[Nimrod103]

The replies are not from recruiters but from people reporting more demand backing up the recruiter's story.

Look at the historic graph of oil prices (http://www.zerohedge.com/news/2014-07-2 ... ice-shocks), and there was a downturn lasting from 1986 to 2006. But after the initial shock in 1986-8, activity picked up as the industry became adjusted to lower prices by cutting costs, and making better investment decisions. It will be so this time as well.

One difference is that the oil shale industry in the USA is very price/cost sensitive, so even a strengthening of $5/bbl has been rapidly reflected in a rise in activity levels. However, the shale industry is continuing to exploit only the sweet spots, and outside of those I still believe the economics to be shaky.

High cost areas like the N Sea will not bounce back, unless oil prices go through $100/bbl, and that might be 15 years away, by which time the existing infrastructure will have been dismantled.
As for exploration, I have seen little sign of a bounceback, and I don't really expect one for a couple of years yet.

[youfoolishboy]

The replies are not from recruiters but from people reporting more demand backing up the recruiter's story.

Look at the historic graph of oil prices (http://www.zerohedge.com/news/2014-07-2 ... ice-shocks), and there was a downturn lasting from 1986 to 2006. But after the initial shock in 1986-8, activity picked up as the industry became adjusted to lower prices by cutting costs, and making better investment decisions. It will be so this time as well.

One difference is that the oil shale industry in the USA is very price/cost sensitive, so even a strengthening of $5/bbl has been rapidly reflected in a rise in activity levels. However, the shale industry is continuing to exploit only the sweet spots, and outside of those I still believe the economics to be shaky.

High cost areas like the N Sea will not bounce back, unless oil prices go through $100/bbl, and that might be 15 years away, by which time the existing infrastructure will have been dismantled.
As for exploration, I have seen little sign of a bounceback, and I don't really expect one for a couple of years yet.

I have worked in O&G since 1989 and have seen a few downturns. The rate I am paid, once I went contract, has gone up after every downturn compared to what I earned before it so costs will rise again. The reason is simple each downturn eliminates many near retirement and during the next upturn there are less people to do the job.
The North Sea could recover tomorrow if a government gets elected, or wakes up, that understands how to manage it, ie lower taxes to achieve a larger return via employee taxs and larger production so never say never, a free Scotland would do that I expect as its an immediate people pleaser due to increased employment.
Exploration is still on the back burner but first you get what assets you have working well and that is what the employment board I linked to is showing, more on site staff being hired.
On a larger viewpoint my worry with shale is they will eat all the production cuts made by OPEC negating the rise.

[Nimrod103]

I have worked in O&G since 1989 and have seen a few downturns. The rate I am paid, once I went contract, has gone up after every downturn compared to what I earned before it so costs will rise again. The reason is simple each downturn eliminates many near retirement and during the next upturn there are less people to do the job. Been in the Industry since 1978. Consultant rates are purely supply and demand. Many will have retired before the next upturn, but there are plenty of Indians/Arabs/South Americans who are skilled enough to survive as international consultants.
The North Sea could recover tomorrow if a government gets elected, or wakes up, that understands how to manage it, ie lower taxes to achieve a larger return via employee taxs and larger production so never say never, a free Scotland would do that I expect as its an immediate people pleaser due to increased employment. Has the Govt any scope to lower N Sea taxes? I thought because of a quirk of the tax treatment of decommissioning, the N Sea tax take actually went negative last year. HMRC will see Hell freeze over before reducing personal income tax in a specific industry, and Govt support for the N Sea oil industry will be politically impossible. At $60/bbl I imagine the N Sea operators will be a little bit profitable, but I don't see tax revenues rising much ever again. An independent Scotland cannot survive without a large and continuous tax take from the N Sea. They run a deficit of 11% of GDP - it is not going to happen.
Exploration is still on the back burner but first you get what assets you have working well and that is what the employment board I linked to is showing, more on site staff being hired.The boom in exploration is always the last foot to fall, usually when improved profitability provides the funds and shareholder optimism to invest.
On a larger viewpoint my worry with shale is they will eat all the production cuts made by OPEC negating the rise. I think it depends how extensive the shale sweet spots turn out to be.

[youfoolishboy]

I have worked in O&G since 1989 and have seen a few downturns. The rate I am paid, once I went contract, has gone up after every downturn compared to what I earned before it so costs will rise again. The reason is simple each downturn eliminates many near retirement and during the next upturn there are less people to do the job. Been in the Industry since 1978. Consultant rates are purely supply and demand. Many will have retired before the next upturn, but there are plenty of Indians/Arabs/South Americans who are skilled enough to survive as international consultants.
The North Sea could recover tomorrow if a government gets elected, or wakes up, that understands how to manage it, ie lower taxes to achieve a larger return via employee taxs and larger production so never say never, a free Scotland would do that I expect as its an immediate people pleaser due to increased employment. Has the Govt any scope to lower N Sea taxes? I thought because of a quirk of the tax treatment of decommissioning, the N Sea tax take actually went negative last year. HMRC will see Hell freeze over before reducing personal income tax in a specific industry, and Govt support for the N Sea oil industry will be politically impossible. At $60/bbl I imagine the N Sea operators will be a little bit profitable, but I don't see tax revenues rising much ever again. An independent Scotland cannot survive without a large and continuous tax take from the N Sea. They run a deficit of 11% of GDP - it is not going to happen.
Exploration is still on the back burner but first you get what assets you have working well and that is what the employment board I linked to is showing, more on site staff being hired.The boom in exploration is always the last foot to fall, usually when improved profitability provides the funds and shareholder optimism to invest.
On a larger viewpoint my worry with shale is they will eat all the production cuts made by OPEC negating the rise. I think it depends how extensive the shale sweet spots turn out to be.

There are companies who will not want work done outside of London as they know the quality produced elsewhere is questionable add to the fact there was a shortage before we went into the downturn in the UK of O&G engineers means I am still confident history will repeat itself again and rates will be higher in the next upturn. Time will tell.
I did not suggest the government reduce personal taxes in O&G I suggested they reduce taxes on the North Sea ie on the amount they charge the companies. Less costs more investment means more jobs and more production a virtuous circle. As for the the accounts of a free Scotland I should point out I was not saying what a free Scotland would look like merely suggesting it would be a good policy should it become so because of the above reason. Since you brought it up though any estimates on Scotland's finances after independence I treat with the same respect of those who predicted economic armageddon should the UK leave the EU, complete guess work and lies told to children there are far too many variables to predict what would happen eg would not a free Scotland now be able to join the EU? How would that change the balance of things?
Exploration is the last foot to fall I agree. With shale I see the limiting factor to more production being the number of lenders willing to fund drilling as the oil price tries to rise as they may be wary of an OPEC price cut again driving oil to $20 to $30 not the number of sweet spots as a rising price will make more areas profitable that were previously not.
PS Just as I finished typing I received the third email request for my CV in 2 days, from 3 separate companies, saying they have work coming up and want an updated CV, I have not had one request like that for 3 years at least.

[Nimrod103]

There are companies who will not want work done outside of London as they know the quality produced elsewhere is questionable add to the fact there was a shortage before we went into the downturn in the UK of O&G engineers means I am still confident history will repeat itself again and rates will be higher in the next upturn. Time will tell. Agree that London still has a reputation, but very likely consultancies will hire foreign staff, if they cannot get enough British.
I did not suggest the government reduce personal taxes in O&G I suggested they reduce taxes on the North Sea ie on the amount they charge the companies. Less costs more investment means more jobs and more production a virtuous circle. As for the the accounts of a free Scotland I should point out I was not saying what a free Scotland would look like merely suggesting it would be a good policy should it become so because of the above reason. Since you brought it up though any estimates on Scotland's finances after independence I treat with the same respect of those who predicted economic armageddon should the UK leave the EU, complete guess work and lies told to children there are far too many variables to predict what would happen eg would not a free Scotland now be able to join the EU? How would that change the balance of things? I was doubting whether the Govt had any scope to reduce N Sea taxation further, before it becomes pointless. Last year I believe the tax income was negative, and for a couple of years before that it raised less than the duty on beer in the UK. The industry is no longer a cash cow. This is not the thread on Scottish independence, but my understanding of how the Barnett Formula work, Scotland's GDP is subsidized by about 11%/year, and that doesn't take account of public sector employment directed at Scotland. If Scotland was to join the EU in its own right (Spanish objections notwithstanding), the Scottish Govt would have to fill that spending shortfall somehow. London won't do it, and neither will Brussels.
Exploration is the last foot to fall I agree. With shale I see the limiting factor to more production being the number of lenders willing to fund drilling as the oil price tries to rise as they may be wary of an OPEC price cut again driving oil to $20 to $30 not the number of sweet spots as a rising price will make more areas profitable that were previously not. Shale oil has been an exciting ride. I doubt that costs can go below $18-52/bbl (Art Berman, writing about Pioneer in Aug 2016), but the unknown IMHO is just how extensive are the areas which can support these lower cost/bbl. I doubt that there is much scope to cut costs further by technology. But for each $10 increase in the oil price, another whole slew of shale areas become economic.
PS Just as I finished typing I received the third email request for my CV in 2 days, from 3 separate companies, saying they have work coming up and want an updated CV, I have not had one request like that for 3 years at least.

[youfoolishboy]

There are companies who will not want work done outside of London as they know the quality produced elsewhere is questionable add to the fact there was a shortage before we went into the downturn in the UK of O&G engineers means I am still confident history will repeat itself again and rates will be higher in the next upturn. Time will tell. Agree that London still has a reputation, but very likely consultancies will hire foreign staff, if they cannot get enough British.
I did not suggest the government reduce personal taxes in O&G I suggested they reduce taxes on the North Sea ie on the amount they charge the companies. Less costs more investment means more jobs and more production a virtuous circle. As for the the accounts of a free Scotland I should point out I was not saying what a free Scotland would look like merely suggesting it would be a good policy should it become so because of the above reason. Since you brought it up though any estimates on Scotland's finances after independence I treat with the same respect of those who predicted economic armageddon should the UK leave the EU, complete guess work and lies told to children there are far too many variables to predict what would happen eg would not a free Scotland now be able to join the EU? How would that change the balance of things? I was doubting whether the Govt had any scope to reduce N Sea taxation further, before it becomes pointless. Last year I believe the tax income was negative, and for a couple of years before that it raised less than the duty on beer in the UK. The industry is no longer a cash cow. This is not the thread on Scottish independence, but my understanding of how the Barnett Formula work, Scotland's GDP is subsidized by about 11%/year, and that doesn't take account of public sector employment directed at Scotland. If Scotland was to join the EU in its own right (Spanish objections notwithstanding), the Scottish Govt would have to fill that spending shortfall somehow. London won't do it, and neither will Brussels.
Exploration is the last foot to fall I agree. With shale I see the limiting factor to more production being the number of lenders willing to fund drilling as the oil price tries to rise as they may be wary of an OPEC price cut again driving oil to $20 to $30 not the number of sweet spots as a rising price will make more areas profitable that were previously not. Shale oil has been an exciting ride. I doubt that costs can go below $18-52/bbl (Art Berman, writing about Pioneer in Aug 2016), but the unknown IMHO is just how extensive are the areas which can support these lower cost/bbl. I doubt that there is much scope to cut costs further by technology. But for each $10 increase in the oil price, another whole slew of shale areas become economic.
PS Just as I finished typing I received the third email request for my CV in 2 days, from 3 separate companies, saying they have work coming up and want an updated CV, I have not had one request like that for 3 years at least.

British companies have been hiring foreign staff for years in SE England last job I worked on was like the United Nations plus I was in charge of a small team in Singapore doing the datasheet bashing work, very badly it must be said. I see less work coming to the UK but rates still rising due to lack of engineers especially if migration rules kick in harder.

The Barnett formula is a tool designed and implemented by Westminster treasury department, a department which recently highlighted the urgent need of an emergency budget should we vote Bexit. As per all utterances from the treasury it is a political calculation not numerical. One suggestion by the way to fill any gap would be to do as the UK is threatening to do and reduce corporation tax massively on oil companies, and any others it deems a good idea to encourage. It will bring a massive infux of jobs and capital, I worked in Ireland and saw such a plan in action years ago. The opposition of Spain against Scotland was based on it leaving a EU member and rejoining the EU as it might encourage the Basques however Scotland will now be outside the EU and the politics is much different especially as it would make the rest of the UK look bad as one of the countries in its Union wants to join another but we are veering into Independence now and I am particularly passionate about that so best leave it and let time show us the rights and wrongs of our arguments.

We agree it appears on shale. I don't see the current cheap costs lasting as drilling ramps up but there is the political will in America just now to make the US oil independent from the rest of the world, Canada excluded, it would appear so who knows what Trump may do to encourage shale drillers. Shale I think we can agree is the thing that will fix the price of oil and I am more pessimistic about them assisting in the rise.