Oil and gas consultancy DNV GL found that nearly three-quarters of the 921 senior oil and gas executives it surveyed were preparing their companies for a sustained period of low oil prices, with job cuts one of the top three methods they cited to control costs.
Oil prices have tumbled 70 percent since the summer of 2014, squeezing companies in the sector, with BP one of the latest major oil players to announce massive job cuts. This month the UK oil giant said it would cut 4,000 jobs exploration and production jobs globally by the end of 2017.
Both U.S. WTI crude and European Brent oil were around $30 a barrel in Asian hours on Tuesday.
The key findings by DNV GL make grim reading for oil and gas workers.
- Headcount reductions look set to increase; 31 percent of respondents said they expected further cuts, up from 25 percent last year.
- Just over 30 percent of executives said they expected to make tougher decisions on capital expenditure, down from 44 percent last year, with the reduction coming from the fact that opportunities for further capex reductions are limited.
- Just 27 percent expect to increase pressure on the supply chain, down from 31 percent in 2015, again because suppliers have already been squeezed almost as much as possible already.
The survey found, however, that Chinese oil and gas managers were considerably more upbeat than their counterparts in other countries. Just 25 percent said they were concerned about low oil prices as a barrier to growth in 2016. This compared with 63 percent of respondents globally.
More than twice as many respondents in China i.e. 43 percent expected their organization to expand its exploration and production activities into new frontiers or challenging environments in 2016, compared to just 16 percent of global respondents.
"Despite the worldwide drop in oil prices, the sector in China is bucking the global trend due to increasing energy demand and new projects coming on stream," Yi Wolfgang Wu, general manager of business development for Greater China at DNV GL, said.