Posted on 01/09/2015 6:49:35 AM PST by thackney
Over 10,000 workers at Mexican oil services companies were laid off this week as state-run Pemex cut contracts in response to the global decline in oil prices- and more job cuts are expected. Most of the oil services companies affected are headquartered in Ciudad del Carmen, on the Bay of Campeche coast in the GOM, and were informed this week that their contracts with Pemex would not be renewed.
Bloomberg quoted Gonzalo Hernandez, secretary at the Ciudad del Carmen Economic Development Chamber, as saying that job losses could increase to 50,000. Meanwhile, Managing director of Xperto Offshore, Stuart Hill, told the news agency, "The city is in shock...We were told that it was based on Pemex's budget reductions."
A Pemex official stated that the contract cancellations will not cut oil output, but they come at a time when some US producers are cancelling long-term contracts for drilling rigs as prices skirt sub-$50/barrel.
Last year, Pemex's production fell for the 10th consecutive year. The company reported a net loss of approximately $4.4 billion in 3Q14, representing its 8th straight quarterly loss.
Some of the contracts will not be renewed due to the fact that the services they provided are no longer needed, according to a Pemex press spokesperson who spoke to Bloomberg. The reductions are not related to company finances and no Pemex workers were laid off, this official said.
An internal Pemex memo sent out on January 2 and seen by El Financiero newspaper decreed the termination of all technical personnel and outsourcing because of cost costs. Through the first 10 months of 2014, Pemex drilled 19 exploration wells- less that a quarter of its goal, according to the National Hydrocarbons Commission.
It is thus apparent that the falling oil prices are imperiling the implementation of the overhauling energy reform passed in December 2013. Hill told Bloomberg that the headcount reductions "seem to come from a combination of falling oil prices and the effects of energy reform."
Maybe not immediately, but certainly in the long run, if the work is not replaced by others.
And they are ALL heading North.
So ND and TX are going to get an influx of O&G laborers?
Texas, probably. North Dakota? When I lived there, we had a saying that -40 tended to drive the riff-raff out.
I read pink slips are going out in North Dakota and one of the oil companies is going bankrupt in Texas.
Drilling Contracts Cancelled As 60 Rigs Are Going Idle For Leading Shale Driller
http://oilpro.com/post/9468/drilling-contracts-terminated-60-rigs-going-idle-leading-shale-dr
The First Shale Casualty: WBH Energy Files For Bankruptcy; Many More Coming
http://www.zerohedge.com/news/2015-01-07/first-shale-casualty-wbh-energy-files-bankruptcy-many-more-coming
I hate cost costs.
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