Hiring Freezes and Exploration Cutbacks in Oil and Gas

Correspondent Derek Armstrong

Commodity price drops and the new economic realities, together with the prospect of a new US Administration, has oil and gas companies cutting back.

With crude-oil prices down at new lows, at $54 a barrel on Nov. 24, down from just under $150 in mid summer, many companies have implemented hiring freezes and are cutting back on exploration. Other industries, who rely heavily on oil and gas, are also cutting back. Revenues, on average, will drop by as much as 50 percent.

Chevron Corp., one of the giants of the industry has suspended plans to double its drilling in western Colorado. “There’s more to this than resource prices,” explained an anonymous upper management source. “Regulatory concerns and credit availability are factors.” Environmental lobbying, health, and wildlife rights may be a priorities of the incoming Obama administration, which can impact costs. “A lot more deals will probably be put on hold,” the source added.

Analysts also expect more mergers and acquisitions as the market continues volatility. Recovery is projected to slow, at best six months, to a more pessimistic 18 months.

The Correspondent— Derek Armstrong is the chief crime reporter for Crime Report USA, a contributor to Films & Books magazine, Deadly Prose magazine, EDI Weekly and an investigative journalist contributing to several newspapers. He is a frequent guest on CNN, NBC, and other networks, and the author of eight books, including the investigative true crime blockbuster Drew Peterson Exposed, the eternally popular Alban Bane crime thrillers MADicine and The Game, and the cult classic historical fantasy novels The Last Troubadour and The Last Quest (from Kunati Books).