Cathy Proctor – Reporter – Denver Business Journal
Citibank on Monday dropped its forecast for crude oil prices, warning that U.S. oil prices could dip to $20 per barrel and average $46 per barrel for 2015, but one human resources expert is warning belt-tightening oil and gas companies to think twice before resorting to mass layoffs to meet newly shrunken budgets.
“This is a cyclical market,” said John Koob, a Houston-based partner focused on the energy industry for Mercer LLC, a unit of Marsh & McLennan Cos. Inc. (NYSE: MMC) that focuses on human resources advice.
“It’s not the first time this has happened and it’s not the last time it will happen, but actions today will have a long-term effect,” Koob said.
Koob was in Denver last week to talk to several oil and gas clients who are scrambling to adjust budgets, staffs, and plans to accommodate crude oil prices that are far below the high of $107 per barrel seen last summer — a point some say may not be seen again for several years, if ever.
He also was discussing the results of a recent Mercer survey of 154 of its oil and gas industry clients that focused on how companies are reacting to the price decline. The survey, available here, launched in mid-December and wrapped up in mid-January.