The drop in oil prices will not result in layoffs in Turkey, but it may impact new oil exploration operations and technical studies, president of a Turkish petroleum workers’ union said recently.
All over the world oil companies are cancelling some of their high-cost offshore and deep sea projects ever since oil prices nearly halved during the last few months.
'Layoffs are usually seen in oil producing countries after fall of oil prices. However, no layoffs in Turkey's oil industry have taken place, neither in the country's national oil company Turkish Petroleum nor the private companies,' Mustafa Oztaskin, president of the Petrol-Is union, said.
Petrol-Is is a Turkish labor union for workers of oil, petrochemical and tire industries.
Oztaskin said that a decrease in investments on new oil explorations, drillings, and technical operations for new wells was expected in the country. He added, however, that the impact of low oil prices on Turkish small-scale oil production would only become noticeable in the long term.
Brent crude oil prices have fallen almost 50 percent since June, from $116 to $58 per barrel mark in mid-December, its lowest point in the last five-and-a-half years. On Monday, Brent crude oil price fell to $57.36 per barrel, its lowest level since May 2009.
Selami Uras, vice president Transatlantic Petroleum Ltd, said the drop forces the oil industry to walk on eggshells because returns on investment become longer.
Transatlantic Petroleum Ltd. is a Texas-based company that actively operates in oil and gas upstream sector in Turkey. It is also the third biggest oil producer in Turkey.
- Layoff in oil companies
Halliburton, the world's second biggest oil company with around 80,000 employees announced on Nov. 8 that it would lay off 1,000 employees at the company’s operations outside the U.S.
Hercules Offshore, a Houston-based energy company, told regulators in early November that the company would lay off 324 employees, or about 15 percent of its workforce and shut down four rigs which were operating in the Gulf of Mexico because of market conditions.
British Petroleum, with 84,000 employees around the world, reconsidered its upstream and production projects after oil prices fell.
The common parameter that designates the relationship between oil income and fall of oil prices is the marginal cost of oil production. If the marginal cost of oil production is high in a region, the country or the company starts to profit less or makes loss.
According to Goldman Sachs' analysis in the middle of December, almost one trillion U.S. dollars in investments are at risk in future oil projects if global benchmark Brent crude oil prices continue to plummet.
By Muhsin Baris Tiryakioglu
Anadolu Agency