Former Shell Oil president: Oil glut can snap back with coronavirus’ end
Former Shell Oil President John Hofmeister discusses his outlook for the oil market amid coronavirus fears and the Russia, Saudi price war.
Top U.S. oilfield services provider Halliburton said on Tuesday it will furlough about 3,500 employees in Houston for 60 days as shale producers slash spending amid falling oil prices.
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The affected staff will alternate working one-week on and one-week off during the two-month period. While they will keep their benefits during the furlough, workers will not be paid for the weeks not at work, a spokeswoman said.
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U.S. shale producers this month cut between 25% and 50% of planned spending as falling demand from coronavirus and a price war between Saudi Arabia and Russia threw the market into a tailspin. U.S. oil prices are down more than 50% this year to about $26 a barrel, from $61 a barrel in December.
Smaller companies that provide equipment and drilling services to oil producers have been hard-hit by the downturn. Directional driller Payzone Directional Services this week disclosed it would halt operations. Liberty Oilfield Services , another Denver-based oilfield firm, last week said its executives would take a 20% pay cut.
CORONAVIRUS CHOKEHOLD ON US WORSENS OIL INDUSTRY'S PAIN
"We believe moving to this schedule will allow us to best manage costs and provide full benefits to our employees during this difficult market," Halliburton spokeswoman Emily Mir said in a statement.
Halliburton, the largest provider of hydraulic fracturing services in the United States, has about 30% of the pressure pumping market share, according to consultancy Primary Vision.
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The Houston, Texas-based company's stock has fallen around 70% in the past four weeks, to $6.14. The firm already took a series of aggressive cost-cutting measures last year due to flat oil prices and slowing producer spending, including multiple rounds of job cuts and idling equipment.
(Reporting by Liz Hampton; Editing by Christian Schmollinger and Richard Pullin)
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