Oil Companies Cut Wages to Preserve Jobs — Energy Journal
Some oil companies are finding that they can’t cut any more jobs than they already have amid the oil-price downturn, so they’re using across-the-board wage cuts, hiring freezes and bonus caps to preserve sufficient staff for their businesses to succeed, Chester Dawson and Benoit Faucon report.
Energy-company layoffs world-wide have topped 200,000, says consulting firm Graves & Co., and more cuts are expected because crude shows little sign of rebounding soon.
Canadian Natural Resources Ltd., one of Canada’s biggest oil and gas producers with 7,600 employees, has ruled out job cuts in favor of pay cuts. The company said it would cut wages for all salaried employees in tiers, trimming pay above 50,000 Canadian dollars ($37,000) a year by 5% and any pay above C$100,000 by 10%.
Phillips 66 scaled back its capital budget as the lower price of oil continued to pressure the industry.
OPEC SEES U.S. OIL OUTPUT DROPPING NEXT YEAR
The Organization of the Petroleum Exporting Countries said lower oil prices are forcing U.S. producers to cut spending, resulting in U.S. oil output falling next year for the first time in eight years, Mr. Faucon reports. OPEC cut its U.S. forecast by 280,000 barrels a day to 13.538 million barrels a day, about 60,000 barrels a day less than this year.
The U.S. decline will reduce overall supplies from producers outside OPEC by 130,000 barrels a day next year, largely as a result of cuts in the former Soviet Union, according to the OPEC report. Still, OPEC producers continued to pump at high rates, and the International Energy Agency said oil markets likely would remain oversupplied next year.