falling oil prices = layoffs? 1

[oil198]

I have an offer from a major EPCM company. I am concerned about the falling oil prices, and how this will effect their work. They have a lot of employees, mostly working on oil sands projects, refineries, etc.

With oil at around $70/bbl right now, with signs of declining further, it is the culture of EPC companies to begin laying off employees if projects are put on hold or cancelled. I guess this is true for almost any company if things get really rough, but the EPC atmosphere from what i've experienced in the past is dropping the axe when things get tough. What are your thoughts? Should I accept the job, it pays well but right now I am at an operating company which take care of their employees more.

 

[BigInch]

Then again, if the price goes down, we just might sell more of the stuff and increase the number of projects. There's a silver lining to every cloud. What you don't want is the price to go so low that they start shutting in producting wells. That = big time layoffs.

"Make everything as simple as possible, but not simpler." - Albert Einstein (1879-1955)
***************

http://virtualpipeline.spaces.live.com/

 

[swearingen]

Remember that our dear friends that make up OPEC aren't too happy with the precipitous drop either. They're looking at substantial cuts in production to keep the price up. They are very concerned about you and are trying, out of the goodness of their hearts, to stabilize the price to keep the EPC's running comfortably...


If you "heard" it on the internet, it's guilty until proven innocent. - DCS

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[BigInch]

A stable dollar would do much to stabilize oil prices ... and everything else as well.

What they didn't tell you is that for the last year, the decline of the USD against the other major currencies correlates very well to most all the important comodity price changes.


"Make everything as simple as possible, but not simpler." - Albert Einstein (1879-1955)
***************

http://virtualpipeline.spaces.live.com/

 

[BigInch]

And ... apparently the only way to get it back up was to explode the financial system and create a world-wide depression.

"Make everything as simple as possible, but not simpler." - Albert Einstein (1879-1955)
***************

http://virtualpipeline.spaces.live.com/

 

[Dirtguy4587]

I drive a big gas-guzzling SUV. I justify it by thinking it is "job security". Now, I need everyone else to buy one too.

 

[Unotec]

Got mine, and the thermostat in the house at a balmy 22ºC

<<A good friend will bail you out of jail, but a true friend
will be sitting beside you saying ” Damn that was fun!” - Unknown>>

 

[Unotec]

Then I'll ride my bike and wear a sweater in the house

<<A good friend will bail you out of jail, but a true friend
will be sitting beside you saying ” Damn that was fun!” - Unknown>>

 

[jistre]

Well, whether or not the drop in the price of oil hits a particular EPC provide hard really depends on what projects that provider has brought on board. If the company's projects are for oil companies who are seeing their profits dry up as the price per barrel drops, there might be problems. However, if the client is downstream from the oil companies and their project uses hydrocarbon based feedstocks, then the drop in the price of oil only makes their investment look better, especially if the project was initiated and profitable when oil was $120+. If they were willing to build at those feedstock prices, then at 60-70 a barrel, they're loving life, assuming their capital streams don't dry up during the project due to other reasons.

As others have said, though, EPC companies live and die by the billable hour, so if there are no contracts, no jobs. Investigate diligently. There are stable companies out there.