International oil and gas companies have suffered from negative earnings in the first quarter of 2020 as a result of weaker petroleum demand worldwide.
More pain is anticipated through the second quarter of the year as oil prices remained depressed in April and prices are still moving in a narrow range in May and June.
The coronavirus disease pandemic impact on oil demand has been severe as unemployment spirals across the energy industry. Now hundreds of thousands of jobs are under threat as the virus triggers layoffs in both the upstream and downstream space. The sharp reduction in the number of oil rigs has led to bankruptcies among both operators and service providers.
Up to 30,000 jobs could be lost from the North Sea alone with BP planning to cut 10,000 jobs — or the equivalent of 14 percent of the total workforce.
The jobs cull has also extended into the North American industry with the Houston region alone preparing for the loss of as many as 300,000 oil and gas jobs.
If such cuts were to materialize, the industry job losses associated with the 2008 financial crisis would pale in comparison.
It is not a reach to see the sector losing more than a million jobs in the absence of an accelerated recovery.
This is an unprecedented time for the industry and a real worry for the skilled and specialized oil and gas workers who may not easily transfer their highly specific skills to other workplaces.
Oil and gas workers are used to moving between companies depending on where the work is. But this is becoming increasingly difficult as the entire energy landscape has been impacted negatively and the recovery in the workplace may take longer than expected.
For an industry once associated with lucrative salaries and strong job security, it will be a painful adjustment.
• Faisal Faeq is an energy and oil marketing adviser. He was formerly with OPEC and Saudi Aramco. Twitter:@faisalfaeq.