Oil and gas experts believe more layoffs could happen soon due to pandemic
HOUSTON, Texas (KTRK) -- Industry experts said with the recent spike in COVID-19 cases, and as the pandemic continues to ravage the oil and gas industry, there will be more job cuts.
Ramanan Krishnamoorti is a professor at the University of Houston Department of Chemical and Biomolecular Engineering. He said with people traveling less, the demand for fuel took an immediate hit as soon as the lockdowns started.
Demand picked up some when the reopening phases began, but with the resurgence of the virus in many states, the tide has turned again.
"The industry is in big trouble," Krishnamoorti said. "You're going to see a lot of bankruptcies, a lot of furloughs, more than furloughs. You're going to see layoffs. You're going to see people leave this entire industry because there aren't going to be jobs."
Along with even more job losses on the horizon, Krishnamoorti said to expect consolidation from big companies taking over smaller ones, like Chevron's buyout of Noble Energy.
In a call with the Texas Oil and Gas Association, Chevron CEO Michael Wirth spoke about the acquisition of Noble Energy, saying the companies are a good fit. He also addressed the grim situation the industry's facing.
"Gasoline demand has come back significantly, and aviation fuel not so much, because there's still a reluctance on the part of many people to get on airplanes," Wirth said.
Wirth remained more optimistic about the longer term outlook.
"The demand for energy is going to grow," he said.
Krishnamoorti agreed things will get better, but said there's miles to go before that happens.
"Looking three years down the road, I think this industry is going to rebound like never before," he said. "But we're going to go through a lot of pain before we get to that."
