The oil industry crash that started at the end of 2014…
… Doesn’t seem to have finished yet as the jobs outlook around the world has yet to improve. There are a few exceptions and anomalies such as the difficulties in finding frack crews, or the resilience of some of the Middle Eastern countries, due to production costs at or around $10 Bbl.
What we’re seeing are similar dynamics to past busts, not just in oil and gas, but in many industries.
Here are a few observations:
The largest companies are resilient due to the long term view they take of the market, and almost unlimited access to capital. For them, surviving a downturn involves adjustments such as accounting tweaks, bond sales, project deferments and job cuts.
Medium sized companies are selling off weaker assets, focusing on cash flow and becoming leaner. One example might include negotiating faster settlements for receivables and delaying payments to suppliers. The focus will be to look at under-performing assets that could be sold, rather than getting taken over by those higher up the food chain.
Small companies find out how valuable their business model really is. In good times, budget can be allocated by medium to larger companies with less caution and/or oversight. Of course, all companies do their best to be efficient at all times, but invariably there will be waste and frivolous expenses during booms. Small companies and start-ups that can survive during good times, might find that their goods or service is not needed when belts start to tighten.
We see daily reports of mergers, acquisitions, discoveries and project news for mid to large scale companies. This article will look at how a couple of smaller companies are riding the storm.We got feedback from 2 very different companies…
… Then see how the lessons learned might help others who are also in the same position.
Relentless Pursuit of Perfection Ltd (rp²) are a leading wells consultancy company. They work with majors to facilitate seminars such as DWOPs, CWOPs and other performance/efficiency based workshops.
2015 and 2016 were fairly standard years for their main workshops, although they saw a drop off for interest in drilling coaching and other lower level services. 2017 is looking to be one of the busiest years ever.
We reached out for a quote from Dave Taylor, the Managing Director at rp²:
We’ve seen a complete drop off for coaching services which is to be expected as many people have dropped down to perform roles that would normally be beneath their pay grade.
The first half of 2017 was one of our best 6 months ever for the larger workshops. We’ve been very busy performing DWOP’s for mid to deep water projects. This might seem counter intuitive since deep water has been hit hardest by the crash.
In a $40-$60 price range, efficiency and cost cutting becomes not just a preference, but a necessity in order for a deep water project to be viable. The majors know about the new exploration crash, and the lead times to get a new project online.
They need future production, but it needs to be profitable. This is where rp² come in, we help major oil companies secure future supply, with minimal risk to their balance sheets by keeping efficiency high, and costs down.
So the lesson here, is that companies need products and services that help them survive. If you can help increase efficiency, and/or lower costs, then you’ll be needed as long as the industry itself survives.Quality, health, safety and environment are facets of exactly the same approach to the business. We can add efficiency and cost saving to the list.Location, location location…
Another way that a small company can survive, is to be placed in a location that is not being hit by the bust.
The oil and gas industry has always had a large transient sector. This applies to companies of all sizes, as well as the workforce themselves. In every oil country around the world, you’ll find satellite offices, and an expat workforce.
Why are there expat oil workers all over the world? The reasons are partly personal such as a love of travel or adventure. The main reason is financial, people and companies move to fertile locations based on economic opportunity. Sometimes these opportunities appear on your doorstep!
We spoke to Josh Munro the CEO at FROutlet, an e-commerce company who sells fire resistant clothing and equipment to oil and gas companies and workers.
Based in Texas, they’ve seen a steady increase in business in the past couple of years, although not without challenges.
The boom in the US onshore oil business has definitely helped us increase turnover. Through feedback from our customer support, as well as seeing patterns in customer addresses, we know that increased drilling activity has helped us.
We send a lot of packages to the Permian Basin, and Eagle Ford for example. We still have our own challenges such as competing with some of the huge national and international e-commerce retailers.
Being based in a booming area (Texas) and offering the same high quality brands, free delivery and money back guarantees has allowed us to do well. We realize how the global oil industry is doing, and we’re thankful that we’ve seemed to have stayed in the eye of the storm so far. One thing that is interesting, is that we tend to sell high end products such as those from Ariat, during good times and bad. Safety is something that should never be compromised on.
Whilst these two companies featured provide only anecdotal evidence, and there are no guarantees in the oil business, there are a couple of takeaways:
Whether you’re an individual worker, or part of a company, are there services and products that you can focus on, that are suited to a bad market? There are likely to be some ways that you could pivot, to allow yourself to thrive the way that Dave has done?
Are you based in the best place for the professional product or service that you’re offering? Now might be the time to consider a re-location of you’re an individual, or an expansion or satellite office into a more fertile area?
Something interesting to share?
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Student guardian visa subclass 590 allows you to stay in Australia as a guardian or custodian or relative of an overseas student who is pursuing an education course in Australia. With 590 student guardian visa, You can stay with your child to take care of him/her in Australia until the course complete. Your child age must below then 18th years old before applying for a student guardian visa 590. If you're a relative then you can stay with the child by submitting written permission of a child’s caretakers like a guardian or grandparents. If your child is older then eighteen years then to apply for visa subclass 590 you need to show that you have special emergency circumstances. You can apply for a 590 student guardian visa outside from Australia and acquire enrollment in alternative courses up to three months with a 590 visa. You will be authorized to take care more then one child if you have. You can do the other study or coach just for 3 months with this Student Guardian Visa Subclass 590.
Step By Step Process About 590 Visa
1.Before Applying for Visa
Meet Eligibility Criteria
• You must be a parent or grandparents or relative of a non-Australian child who is below 18th of age.
• If you want to apply from inside of Australia then you need to hold a substantive visa except for domestic worker, temporary work visa, transit visa, visitor visa, etc.
• If your another child who is below 18th and not coming to Australia with you then you need to give evidence that you have made welfare arrangement for the child.
• You have to account for your all healthcare expenses so make sure that medical insurance can only reduce your expenses.
• Your past immigration history must be credible like you must not have any visa cancellation history.
• Your intention should be genuine at the time of applying for student guardian visa 590 and it should be not against Australian culture and policies.
• If your family members are also applying with you then they also need to meet health policies of the Australian government
• Only a parent or grandparents or custodian or step parents of an overseas student visa 500 holder can apply for this student guardian visa subclass 590.
• If parents are not present due to any reason for looking after the visa subclass 500 holder student then any relative can apply for this 590 student guardian visa.
• You must be a guardian of an international student who must be below 18th of age except for exceptional circumstances.
• You have to give assurance to immigration authorities that you will be able to provide welfare.
• Your age must be above 21 years old before going to apply for a student guardian visa 590.
• You have to pay back any type of debt to the Australian government if you have.
• If you have another child aged 6 years old then you can bring him/her to Australia but if your child if older then 6 years then you need to show emergency condition to bring him/her to Australia.
•Provide character certificate and other national identities.
•Submit bank documents and salary slips to prove that you will be enough capable to give welfare to the student.
•Provide guardianship documents to prove your credibility to that child.
•Translate your non-English documents into English.
•Submit legal student guardianship form.
•Provide dependent under 6 documents if you bring your child who is under 6 years of age.
2. Processing Time And Cost Of This Visa
Visa subclass 590 cost starts from AUD 560. This visa 590 may proceed in 2 to 4 months. But in case you forget to submit any documents then you processing time of visa can be increased. Your visa application processing time can be increased if you provide incomplete information.
3. Apply For The Visa
You need to apply online for the 590 student guardian visa 6 weeks before the student’s course starts. At the time applying for the visa, you have to prove that you are genuine and legal applicant by submitting legal documents. If you submit illegal information to immigration authorities then they have the authority to cancel your visa application immediately. You and your relative which is listed in visa application will not able to get a visa for the next 10 years in case of any fraud by you. You should contact an experienced Immigration Agent Adelaide.
4. Conditions After You Have Applied For The Visa
• You are not allowed to do any type of work in Australia.
• You can study only for 3 months.
• With visa subclass 590 you can’t apply for another visa
• At the time of leaving Australia, you must have brought the student to your country.
• If you have another child who is below 6th years of age then you can bring him/her to Australia.
Get The Direction To Migration Agent Adelaide - ISA Migrations and Education Consultants.
U.S. petroleum and natural gas production increased by 16% and by 12%, respectively, in 2018, and these totals combined established a new production record. The United States surpassed Russia in 2011 to become the world's largest producer of natural gas and surpassed Saudi Arabia in 2018 to become the world's largest producer of petroleum. Last year’s increase in the United States was one of the largest absolute petroleum and natural gas production increases from a single country in history.
For the United States and Russia, petroleum and natural gas production is almost evenly split; Saudi Arabia's production heavily favors petroleum. Petroleum production is composed of several types of liquid fuels, including crude oil and lease condensate, natural gas plant liquids (NGPLs), and bitumen. The United States produced 28.7 quadrillion British thermal units (quads) of petroleum in 2018, which was composed of 80% crude oil and condensate and 20% NGPLs.
Source: U.S. Energy Information Administration, based on International Energy Statistics
Note: Petroleum includes crude oil, condensate, and natural gas plant liquids.
U.S. crude oil production increased by 17% in 2018, setting a new record of nearly 11.0 million barrels per day (b/d), equivalent to 22.8 quadrillion British thermal units (Btu) in energy terms. Production in the Permian region of western Texas and eastern New Mexico contributed to most of the growth in U.S. crude oil production. The United States also produced 4.3 million b/d of NGPLs in 2018, equivalent to 5.8 quadrillion Btu. U.S. NGPL production has more than doubled since 2008, when the market for NGPLs began to expand.
U.S. dry natural gas production increased by 12% in 2018 to 28.5 billion cubic feet per day (Bcf/d), or 31.5 quadrillion Btu, reaching a new record high for the second year in a row. Ongoing growth in liquefied natural gas export capacity and the expanded ability to reach new markets have supported increases in U.S. natural gas production.
Russia’s crude oil and natural gas production also reached record levels in 2018, encouraged by increasing global demand. Russia exports most of the crude oil that it produces to European countries and to China. Since 2016, nearly 60% of Russia’s crude oil exports have gone to European member countries in the Organization for Economic Cooperation and Development (OECD). Russia’s crude oil is also an important source of supply to China and neighboring countries.
Russia’s natural gas production increased by 7% in 2018, which exceeded the growth in exports. The Yamal liquefied natural gas (LNG) export facility, which loaded its first cargo in December 2017, can liquefy more than 16 million tons of natural gas annually and accounts for almost all of the recent growth in Russia’s LNG exports. Since 2000, more than 80% of Russia’s natural gas exports have been sent to Europe.
Saudi Arabia’s annual average crude oil production increased slightly in 2018, but it remained lower than in 2016, when Saudi Arabia’s crude oil output reached a record high. Saudi Arabia’s crude oil production reached an all-time monthly high in November 2018 before the December 2018 agreement by the Organization of the Petroleum Exporting Countries (OPEC) to extend production cuts.
In addition to exporting and refining crude oil, Saudi Arabia consumes crude oil directly for electricity generation, which makes Saudi Arabian crude oil consumption highest in the summer when electricity demand for space cooling is relatively high. Since 2016, Saudi Arabia’s direct crude oil burn for electric power generation has decreased for a number of reasons, including demand reductions from a partial withdraw of power subsidies, greater use of residual fuel oil, and increased availability of domestic natural gas.
Crude oil exports account for about 60% of Saudi Arabia’s total economic output. China, along with Japan, South Korea, Taiwan, and the United States remain critical markets for Saudi Arabia’s petroleum exports.
Headline crude prices for the week beginning 12 August 2019 – Brent: US$58/b; WTI: US$54/b
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