Survey: Oil firms ready to start hiring, spending - Outlook for next year a gusher
By MICHAEL DAVIS
Houston Chronicle, December 8
After a year of laying off workers and paring back spending because of low oil
prices, energy companies plan to start hiring and increase their drilling budget,
according to a survey released Tuesday.
The survey of executives at 89 energy companies by Arthur Andersen found that
64 percent of them plan to increase spending for oil and gas exploration in 2000.
Oil prices have staged a remarkable recovery, with the January crude futures
contract closing at $26.22 per barrel Tuesday, compared with $14.42 for the
same day last December
However, major oil companies are being more cautious when it comes to
ramping up spending in the United States.
While 77 percent of the large independent companies are planning to spend
more on exploration in the U.S., only 29 percent of the majors are planning
higher U.S. spending.
"While the independents rank the U.S. and Canada as the most attractive areas
for exploration and development investment, the majors who responded to our
survey rated West Africa and the Middle East far ahead of the U.S.," said
Victor Burk, managing director of energy industry services for Arthur Andersen
in Houston.
On Tuesday Archie Dunham, chairman of Conoco, disclosed that the Houston
oil company plans to increase its capital expenditures budget next year by about
30 percent from $1.8 billion to as high as $2.4 billion. But exploration gets only
a slice of that. Conoco plans to spend $500 million for refining and marketing
and the rest will for for oil and gas exploration and production, Dunham told
reporters at a news conference sponsored by Arthur Andersen.
The higher budgets in the industry translate to more hiring in the oil patch. About
52 percent of the executives polled said they plan to increase exploration and
production employment next year.
But finding those workers may be a challenge. Some 32 percent of those
surveyed said they are experiencing a shortage of skilled personnel at their
companies, with large independents suffering the worst.
"This industry is not seen as an attractive place of employment," Burk said. "This
will be a major challenge in the next decade."
Oil service companies have seen so many ups and downs in oil prices they're not
about to celebrate over predictions of one good year ahead.
"Since '92 the industry has enjoyed only two good years, in '97 and '98, said
Carl F. Thorne, chairman and chief executive officer of Ensco International. "The
roller coaster ride will continue and may become more intense."
Chronicle reporter Nelson Antosh contributed to this story
chron.com |
