Global exploration spending has contracted by almost 25 percent, the equivalent of $120 billion, due to delayed or cancelled projects. Additionally, global rig count – the key indicator of level of future exploration activity – has shrunk by 43 percent over the past 12 months.
Oil field services companies are being squeezed on almost every front, given falling oil prices. Their total revenues are expected to have declined by 20 percent through the end of 2015, based on third-quarter results. If oil prices remain at current levels, we estimate that oil field services firms’ revenues could decline by another 28 percent over the next four years, and we expect steep, long-run declines in spend across the industry, with drilling companies being hit almost twice as hard.
While it’s true that cost cutting can enable a strategy for survival, it cannot take the place of one. Our articles explores a “top three” list of potential approaches that mid-tier oil field services firms should be considering. These strategies are about to reshape, and perhaps significantly strengthen the oil field services industry, and their impact will be felt long after the present big squeeze.
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Three strategies to survive the current oil price downturn.
Bill Heath, Adam Perkins
Impact of lower oil prices on workforce in 2015-2016
The steep decline in oil prices will result in workforce reductions in some regions, but some countries are still hiring