It Doesn't Seem Like Many Workers in the Oil/Energy Sector Really Get It About How Bad Things in the Industry Are

I've been seeing a lot of posts about people complaining about how their employer (energy company/oil company) is freezing salaries, suspending 401k contributions, suspending profit sharing/bonus payments, etc.

Uh, there seems to be a huge disconnect between a lot of workers expecting these things and what's happening in the energy sectors. Companies are losing a shitload of money. There are companies that borrowed at up the ying-yang when oil was $80/barrel. These companies borrowed with really unfavorable terms, and the assumption these companies made was that oil would be at least above $50-60/barrel. We're at $30-34 right now. Those debt obligations are coming due, if not in the short term, in the long term... Oil prices aren't going to go up anytime soon, because there's so much supply right now, the Saudi's are going to continue to flood the markets, Russia has excess capacity, and Iran has not even begun to export on a massive scale yet..

A lot of oil/energy companies are going to go bankrupt. Banks are going to get screwed because those CDO debt obligations will be worthless... Think of the banking crisis that happened in 2008-9 in the consumer housing market, except this will happen in the oil/energy industry, only much worse.

Why are you people still complaining about salary freezes, bonus suspension, 401k match suspension? In all likelihood, same time next year, you won't have a job, and you'll be wishing you had one even if it had no matching 401k, bonsus, or if the salary is a little low. You'll have a huge supply of workers in the energy sector looking for work, chasing down a few jobs that will survive.

Comment! It's anonymous!

13 replies (most recent on top)

#gold

... so who wants to bet against a 15-yr trend and rely on 6mpg trucks coming back?

And bring back the hummer h2

Yes. But that's because a lot of folks started to drive toyota priuses.... What we need are more Ford excursions....:)

US Gasoline demand (thousand of gallons per day):

1990 - 60,300

2000 - 60,900

2010 - 44,700

2011 - 39,000

2012 - 29,700

2013 - 24,700

2014 - 21,600

... bottomless coffee :)

Of course, we can all just drive 10 cylinder trucks that get 6mpg again, and start doing oil changes in 3000mile intervals instead of 7500-10k...That will increase demand :)

Oh, something else - Saudi did this to increase market share but also push out peak demand for oil. The lack of projected demand for 2016 reverting back to mean at these low oil prices and the end of the China super cycle show that the attempt to stimulate and push out peak demand is failing. In my working lifetime oil will still be dominant however we are transitioning to natural gas and then renewables. Money flows for longer term investors such as pension funds are flowing out of oil. Businesses that don't grow require a healthy dividend and ConocPhillips are not offering that.

... that's fine, I've found a coffee house with a bottomless coffee deal and the lack of cookies is helping me lose weight :)

Wrong! There will be no cookies, no lunches, and no travel!

Apologies, that last post needs some explanation - companies like Total and Exxon borrow based the low oil price jn the oil cycle ($40). ConocoPhillips and others borrowed based on $100. Redeterminations of the value of the collateral behjnd these loans are made in the Spring and the Fall basd on the prior twelve months realised oil price. For the fall we are starting with Q4 2015 at $42, the bottom in oil price according to fundamentals will be after the summer. Reasonably we can expect an average price of between $25-35 for the fall redetermination. That's when the crunch will occur and all Saudi has to do is wait another six months.

As we all know from personal experience when you borrow too much the banks own you ... that is what is happening right now in the oil patch - we are owned by the banks. The banks will attempt to stay whole while the companies get destroyed - equity wiped out and employees on the dole. It is what it is ... I just wish management had been more ethical in their dealings with me and other employees let go rather than playing poker to keep their bonuses and compensation. Who now regrets bragging to Saudi about "too many opportunites?"

preach, brother, preach.............

Oh, and all you haters of China and India finally get your wish... The economy in China and India is slowing down, significantly..China and India were heavy consumers of oil/energy, and what was keeping up energy prices for so long.... Not only do you have a problem with a lot of oil supply because every oil producer is producing at maximum capacity, you have a huge demand problem in that people that were previously consuming oil (China/India) just fell off a cliff.

Thread regarding ConocoPhillips layoffs

It Doesn't Seem Like Many Workers in the Oil/Energy Sector Really Get It About How Bad Things in the Industry Are

13 replies (most recent on top)

Post a reply