Story by Reuters
Halliburton, Statoil ASA, Hess Corp and other North Dakota energy companies have decided, for now, not to lay off staff in the No. 2 U.S. oil producing state, hoping to be prepared for any prolonged rebound in crude prices.
Many oil producers and their contractors are trying to strike a balance between cutting costs and maintaining workforce reserves after a more-than 50 percent drop in oil prices since last June.
The drop has made some oil patch investors anxious that North Dakota could experience a third oil bust after slumps in the 1950s and 1980s. Local business leaders, though, say they’re confident the state’s economy can abide the slowdown.
Indeed, oil prices are nothing if not volatile, up about 19 percent in the past four trading days after plunging for months.
Whiting Petroleum Corp, the largest North Dakota oil producer, has no plans to lay off any of its 507 employees in the state, spokesman Eric Hagen said.
Oilfield service provider Halliburton has told its roughly 1,500 North Dakota employees that job cuts are not coming, for now. The update came in a letter to staff from Brent Eslinger, senior district manager for Halliburton in Williston, considered capital of North Dakota’s oil patch.
Halliburton spokeswoman Susie McMichael added that the company “will continue to monitor the business environment” and cut costs as needed.
Hess Corp, the state’s third-largest oil producer and one that uses Halliburton to hydraulically fracture wells, has no plans to cut North Dakota staff.
“We’re all about lean efficiencies, but there are no plans for layoffs,” Hess spokesman John Roper said.
Other large North Dakota producers, including Oasis Petroleum Inc and Statoil, have said they have no plans to reduce their workforce. EOG Resources Inc hasn’t “announced any layoffs,” spokeswoman K Leonard said.
To be sure, all energy-related companies in North Dakota’s oil patch are hunkering down. Many of the state’s oil producers, including Hess and Oasis, have cut 2015 capital budgets. Whiting and EOG release spending plans later this month.
While there are nearly 800 wells needing to be fracked in North Dakota, oil producers can wait up to a year to do so. Hess, for instance, plans to bring fewer wells online in 2015.
Halliburton’s announcement last month that it will lay off 1,000 in the eastern hemisphere – as well as similar plans by peers Schlumberger NV and Baker Hughes Inc, which Halliburton is buying for roughly $35 billion – sparked concern that the companies would cull large portions of their North Dakota staffs, steps that would have a negative economic ripple effect. Such fears, for now, appear unwarranted.
Continental Resources Inc, North Dakota’s second-largest oil producer, did not return a call seeking comment on staffing levels. Chief Executive Harold Hamm, though, bragged in a Tuesday press release that Continental’s North Dakota acreage continues “to provide exceptional results.”