Oil & Gas 360® Industry Leadership Survey Results
Oil & Gas 360® completed a survey of industry executives last week. The survey was offered to 3,000 current industry leaders working at the highest level.
The purpose was to gather the views of chief executives and other c-level officers at E&P, OilService, midstream and related companies as to what they believe will be the next catalyst to move commodities prices, what job titles the industry will fill in 2016 and what oil price would start a hiring boom, and send industry employment back to 2013 levels.
Seventy-five percent of the survey respondents were C-suite oil and gas company executives. The remaining 25% were predominantly from financial institutions serving energy companies.
The universe of respondents included c-suite and other highly placed executives from the following company categories:
- 2% Integrated Oil Company
- 36% E&P Company
- 15% Oilfield Service and Technology
- 1% Midstream
- 9% Buyside Financial Institution
- 8% Sellside Financial Institution
- 6% Commercial Bank
- 23% Other: including Engineering & Operations Consulting firm, Rating Agency, Energy Infrastructure Company, Mineral and Royalty Company
Here are the questions and the results:
What price range for WTI would start a new industry hiring trend, in your view?
- 45% of respondents said $60-$70 would kick off a hiring trend
- 37% said it would take $70-$80 oil to begin a hiring trend
- 8% said $80-$90 oil
- All other price ranges were well below 3%
For which job specialties do you see companies adding new employees in 2016?
- 37% of respondents said “None”
- 35% said Petroleum Engineers would be hired in 2016
- 25% said Reservoir Scientists
- 17% said New College Graduates
- 10% said Geologists, Corporate or Field Level Managers, Financial/Accounting
- Below 5% said Product Sales/Marketing, new MBAs, Corporate Communications/IR
- The “Other” category got 10%: including IT personnel, Landmen, Field personnel, Laborers; and one person said “Crisis Counselors”
What would it take for the industry to return to the size of employment we saw two years ago?
- $100 oil – 16%
- $80 oil – 18%
More than 20% of the respondents to this question referenced stability in a similar way to these responses:
- “Stability around a higher price point”
- “Oil above $80 for more than 3 years”
- “80+ oil and the sense that it would remain there for some time”
- “Price stability with drilling and service prices in-line with the price of natural gas and oil”
- “$100+ oil, efficiencies have changed the amount of personnel needed to achieve the same results as 2 years ago”
- “Stabilized oil prices above $65”
- “Stability at a $70 price for at least 6 months”
- “Over a full year of WTI above $90”
- “$70 oil and some stability in it”
- “Stable $70-$75 oil; stable regulatory environment; in short – stability”
Other executives were more pessimistic regarding another hiring boom:
- “Due to the extreme efficiency that the industry is creating, I feel that we will never get back to levels of employment of personnel and equipment that we saw two years ago. Each day our efficiency becomes better.”
- “That seems essentially impossible. The activity level of two years ago was driven by irrational spending which is characteristic of a boom. Much of that spending was truly wasted money, chasing unprofitable projects fueled by too easy credit and a very false evaluation of the economic viability of a majority of the wells being drilled.”
- “It will take the removal of a major global supplier which then puts U.S. shale production back into action to feed growing demand via exports.”
What will be the next major catalyst that will cause the price of oil to make a significant move? Will that cause prices to go up or down and why?
- War, chaos or supply disruption in the Middle East – 26%
- Saudi pull back of production – 8%
- Russia mentioned – 6%
- Iran mentioned – 9%
- Allowing U.S. energy exports – 7%
- OPEC mentioned – 13%
Responses to this question ranged all over the boards with Middle East war or supply disruption mentioned in some form by one out of every four respondents.
Representative responses are below:
- “Iran volumes have risk of driving prices materially lower still. Greater than expected U.S. declines (~1 MMBOPD peak to trough) would help push prices higher.”
- “UP: Middle East supply disruption; DOWN: Middle East ‘peace’, ending Russian embargo
- “Suspect we will have some type of event in the Middle East (caused by Russia/Syria). Will cause near term prices to really spike but won’t follow through on the curve so producers can’t hedge. I don’t believe we will see a sustained recovery (forward curve +$70) until China shows steady growth in oil consumption and U.S. production has fallen below 8 million BOPD.”
- “Down due to European and Asian recession.”
- “Significant declines in U.S. production levels from reduced capital spending. Alternatively, change in demand expectations either up or down may have significant impact on pricing.”
- “Large declines in U.S. shale production – price modestly up. OPEC resolve to set a higher price for oil – price up strongly.”
- “Iranian energy infrastructure development is a looming catalyst. After contracting with Western oil companies to develop reserves, the start of construction on additional services facilities and take-away capacity will be a spark to move and keep prices below $50/barrel.”
- “Next catalyst will be an additional 15%-20% decline in rig count by yearend that should have a favorable effect on supply.”
- “Saudi and Russians reach an agreement.”
- “Collapse of shale upstream/capital market bubble.”
- “U.S. presidential elections, allowing fossil fuel exports.”
- “The drip-drip-drip of the falling rig count every Friday combined with falling production released every Thursday, a positive OPEC technical meeting in Oct. and the Dec. OPEC meeting, plus the oil export bill being signed.”
- “I don’t see a major catalyst driving price change. Rather, I see continued slow-and-low-but-steady economic growth and a deflationary service cost environment. These two factors suggest to me that pricing moves are not going to be volatile. In short, there’s no catalyst that’s going to move the needle (after all, Nigeria, Iraq, Syria, Libya and the Ukraine failed to when demand was much higher and spare capacity much more constrained.)”
- “Venezuela goes into civil strife, PDVSA goes on strike, mass rioting and looting, leaves oil infrastructure damaged and off line for 6+ months: oil up.”
- “Major war; our industry is still moving up on production, plus governments are forcing more green energy. The only positive upside could be gas if all governments push harder on greenhouse gases to meet environmental commitments by 2025.”
