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Who’s next? July 29, 2015

Posted by hslu in Economics, Energy, jobs.
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Chevron will eliminate 1500 jobs to help the oil company deal with low oil price. It needs To let these people go to be abe to keep the dividends at current level.

It’s the first U.S. major oil company to do so.

The headcount reduction at CVX is superficial and it affects HQ only. If low oil price persists, more cuts will come. There is no other way to do it.

Now, who will be the next U.S. major oil company to do the same?

You can flip a coin to decide because there are only two left:

1.   ExxonMobil
2.   ConocoPhillips

I believe XOM regularly let the bottom 1 to 2% employees go and XOM runs its E&P business very conservatively.

My guess is COP because it is roughly 40% of the size of CVX in terms of market value and about 30% in terms of number of employees.

We’ll see how long COP can resist the urge to hand out pink slips.
Afterall, some one has open the flood gate.

Prettysoon, a trikle will become a gusher spreading out to others.

Offshore Oil Spills July 22, 2010

Posted by hslu in Economics, Energy, Global Affair.
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ExxonMobil, Chevron, ConocoPhillips and Shell are  setting up a non-profit company called Marine Well Containment Company to come up with a rapid-response system to handle offshore oil spill. It will take 6 months for a team of engineers from each of the four companies to develop a solution to contain future underwater blowout in GM and elsewhere in the world.

The system can be mobilized within 24 hours of the blowout to contain oil spills in water as deep as 10,000 feet and capture up to 100,000 barrels of oil a day.

Each company will put in $250 million and I am sure service companies will be involved.

Over the years, the U.S. oil companies have faced tremendous competition for development leases in foreign countries. They have to survive in the era of wide swings of crude oil prices, Congress’s attack and unfair (windfall profit) taxes, hatred from American public and unfair advantage of National Oil Companies: Saudi Arabia, Iraq, Iran, Chinese, Russian, Kuwait, Venezuela, Indonesia and many others.

One thing that has helped them to survive all these years was the advancement of petroleum technologies in every discipline: geophysics, drilling, production and reservoir engineering; because if it wasn’t for the advancement of technologies, these public traded companies would have ceased to exist.

The easy fruit in the world has already been picked. Now these companies have to go out deep in the ocean and search in the most remote areas of the world to find projects that are worth developing. Without new technologies, development and production costs will be too high and they will not be able to compete with National Oil Companies in the open market.

I have no doubt that American oil companies will overcome this hurdle too.

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