According to a recently released report from one of the oil and gas industry’s technical advisors, oil companies are continuing to make cost-cutting a top priority. This comes as the industry forecasts a “sustained period” of low oil prices, continuing the trend we have seen in recent years.
Unfortunately, as we have previously discussed, when oil companies face challenges in turning a profit, it is often their workers who pay the price. Safety prioritization and staffing levels tend to be among the first areas to take a hit when oil and gas employers put cost-cutting measures in place. This translates to more risks for the workers who stick around, with offshore workers in particular facing dangerous – and sometimes fatal – hazards daily.
We all know this. Research and lawsuits have shown that many of the oil and gas companies’ cost-cutting measures put their employees at greater risk. So, can we expect any changes in terms of where oil companies cut costs in 2016 and beyond?
Oil and Gas Companies Are Repeating Their Mistakes
In a survey included in the report, a majority of senior professionals in the oil and gas industry said that they believed the industry is doomed to repeat its mistakes from previous economic downturns. This is not good news for workers. In particular, these individuals expressed concerns over:
- Loss of jobs
- Loss of experience on oil rigs and other sites
- Lack of efficiency
Each of these has been shown to contribute to an increased risk of injuries and death for offshore workers and oilfield workers alike. These issues also tend to be indicative of an overall de-emphasis on safety – which was ultimately identified as one of the key failures leading up to the tragedy of the Deepwater Horizon.
So, just how much cost-cutting can we expect to see in the coming years? According to the report:
- Sixty-two percent of those surveyed said they expected a decrease in oil and gas companies’ capital expenditures (on things like new equipment and rig upgrades). These expenditures dropped by an estimated 30 percent in 2015, and are expected to drop another 20 percent this year.
- Staffing reductions are expected to increase to 31 percent in 2016, up from 25 percent last year.
- Suppliers will continue to face pressure to cut costs, and likely have already been “squeezed as much as possible.”
Offshore Workers Are Likely to Continue to Face Major Risks
All of this means that offshore workers are likely to continue to face risks that often could – and should – be avoided. Decreased staffing levels, inexperienced employees, aging oil rigs, and a lack of cultural emphasis on safety are all issues that frequently lead to offshore injuries. For workers who get hurt offshore, their only option to protect themselves may be to hire an attorney to stand up for their legal rights.
Morrow & Sheppard LLP | Experienced Attorneys for Offshore Workers and Their Families
If you have been injured or a loved one has been killed working offshore, we want to help you fight for just compensation. We are passionate about protecting the rights of offshore workers, and we have the experience and resources necessary to hold the oil companies accountable for their actions.
To find out if you may be entitled to compensation under the Jones Act or another federal law, call our Houston law offices at (800) 489-2216 or contact us online to speak with a Houston Jones Act lawyer today.