Half of U.S. oil and gas senior executives expect to increase employment this year and two-thirds believe the recession that burdened 2009 will end in 2010, according to the eighth annual Survey of Upstream U.S. Energy Companies, from Grant Thornton LLP, Houston, Texas, issued Feb 1, 2010. Reed Wood, Grant Thornton LLP’s partner-in-charge of the firm’s energy practice, detected optimism from the respondents of the 2010 survey. “It was convincingly evident in their outlooks for prices, capital expenditures, and employment.”
While only a third of the respondents expect an overall increase in employment for the industry as a whole in 2010, half say their company would increase its employment levels. The 2011 numbers are more promising, with 74% of respondents saying they expect industry employment to increase and 56% expecting their own company’s employment to increase.
With regards to the economy, two-thirds of senior executives at oil and gas companies believe conditions will improve enough for the U.S. economy sometime during 2010 for most business leaders to consider the current recession over: 34% said the first half of 2010 while 33% said the second half of 2010. In addition, 71% said they believe the recession will end in 2010 for the upstream sector and 65% for service companies. Only 11% said they believe the recession has already ended for the U.S. economy, 7% for the upstream sector and 1% for service companies.
Wood feels the survey responses consistent with industry leaders that “the upstream industry experienced increased cash flow during the second half of 2009 and more favorable interest in their domestic capital intensive projects requiring highly trained and experienced personnel. Continued stabilization and improvement of key drivers should result in 2010 as a strong beginning of hopefully another extended recovery for the industry and the U.S. pursuit of less dependence on foreign resources.”
Additional industry issues and opportunities from this year’s survey include:
- Uncertain natural gas and crude oil prices repeat for a second year as the top concerns in the industry.
- Respondents still believe incentives for increased U.S. drilling are the number one way to reduce energy prices for U.S. consumers.
- While most respondents see alternative fuels as a long-term solution, they indicated that clean coal is the most likely to be effective in the short term.
- Area of most opportunity: Successful exploitation of existing prospects, followed by mergers and acquisitions, and operating efficiencies.
- 35% of respondents believe the U.S. is a global leader in energy, while 80% believe the U.S. is lagging because of its dependence on foreign energy sources.
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