Since 2014, prolonged low oil prices have had huge repercussions on the Oil Industry, resulting in many sub-contractors being badly affected and major job losses. If you remember all the way back to January, we were talking about how the first green shoots of recovery were finally beginning to show, but has this translated into reality?
Low Prices were brought about by an over-supply of Oil which forced down prices, forcing many Oil Producers to pull back from now unprofitable ventures, and since there has been wide scale restructuring of operations, supply chain and finances. When commodity prices were high many exploration and production companies were actually spending beyond their means and were relying heavily on credit, since the downturn it has become much harder for these companies to access external finance. This has put a lot of pressure on the sector to increase flexibility and get better value for money from its supply chain and what we’ve seen is that despite continuing low prices, businesses have been able to adapt.
We have seen prices slowly start to rise throughout 2017, and although there is more optimism from the sector a new challenge is now emerging. During the last three years a lot of talent has left the sector, and now that Oil &Gas are finally hiring again, will people come back? A recent report by NES global talent surveyed 3,000 employers and found that for the first time in 3 years, businesses are hiring more people than they are letting go. This is certainly a small but positive sign for an industry long in turmoil. For many decades the industry adopted an almost ‘growth at all cost’ approach and when prices crashed many redundancies were made and long standing infrastructure abandoned. Mass recruitment at ‘skilled’ level is now crucial if the industry wants to get back on its feet, but the workforce are unlikely to forget recent instability.
As for ourselves, as a sub-contract machinist providing a variety of components for the industry we have seen new enquiries in 2017 that simply had not been there for previous years, a positive indication, we have also seen that value for money is key and so more businesses are looking to shop around where perhaps before they would simply stick to the suppliers they had always used.
While Oil & Gas has been floundering many have started investing elsewhere and renewable energies are perhaps in many respects overtaking the industry, in order to bring back confidence a long period of stability will be needed. We would expect 2018 to see more jobs and more procurement opportunities in this sector.