Well right now the oil price is as low as 33 dollars a barrel...and I am sure it costs Oil companies a similar amount or as much as 40 dollars a barrel to break even.
For a couple of years the price was high and buisness looked good, but this is a reactive business and not know for being pro-active!
During the good times decisions are taken to build new rigs, day rates paid by oil companies to drilling contractors are forced high by the economy...but unfortunately the salaries do not jump with the market!
But some companies do try other tactics to lure people into a business which is drastically short of skilled labour...offering bonuses on starting or yearly paid and these can vary from company to company
At present companies are tightening the purse strings and are being seen as doing so, cutting down on unnecessary travel, cutting back on hospitality lunches etc.
If the economic downturn continues rigs will get stacked, whereby they stop drilling until it is deemed financially viable to drill again. If you are on the rig that is stacked and you are an agency hand or work for a smaller company...then you generally get paid off!
In my opinion a proactive business would build rigs in a downturn for cheaper rates, get a better deal and then wait for the upturn as recently numerous companies have started to build rigs and have paid way over the top for what they are really worth....similar to the housing market really!
I think some more companies will merge and some smaller ones maybe eaten up by the bigger ones for being reactive rather than proactive!
The rig in the picture is the newly christened Maersk Resolve, where money was saved on a low key christening ceremony.
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