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Calgary 鈥� It may be a rough, long road ahead for the oil industry, according to Mark Sakeld, president and CEO of the Petroleum Services Association of Canada (PSAC).听
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He spoke to Pipeline News via phone from Calgary on Jan. 24.听
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鈥淲e鈥檙e bracing for a difficult road ahead, is a broad perspective. We鈥檝e had some really interesting discussions around our boardroom table, interesting meetings with our members. We鈥檒l be meeting up with the producers early next month,鈥� he said.听
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鈥淎t this point in time, it鈥檚 not looking good. To add to that, right now we鈥檙e in our winter activity mode, and it鈥檚 going good. Contracts are in place and wells are 小蓝视频 drilled. The interesting comment I鈥檝e heard with regards to this quarter is the breakup may come sooner than normal based on economics versus environment. We shut down for breakup with the thaw, but with budgets 小蓝视频 slashed, we might be shutting down sooner.Oil was priced at under $50 a barrel WTI when Sakeld spoke about prospects for PSAC鈥檚 members the rest of the year.
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鈥淚nto Q2, it will be very, very interesting. Q3, I鈥檓 hearing all sorts of comments about it 小蓝视频 quiet. As early as yesterday I heard flat into Q4,鈥� he said.
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鈥淭he main story I鈥檓 getting is it鈥檚 going to be a rough year overall. There might be a bit of a pickup toward the end. Nobody really knows.
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鈥淭he one thing I am impressed with in the conversations with our members is there is a lot of effort in retaining people. Before, years ago, I was laid off because of the NEP (National Energy Program). I鈥檝e never forgotten it. The highest cost was labour, so you just got rid of it.
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鈥淭here鈥檚 so much invested today in skills and training and safety and technology and competency, you do anything you can to keep people.鈥�
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Sakeld noted PSAC has contacted the federal government about job sharing programs to help the industry keep jobs until oil and gas prices recover

鈥淲e鈥檙e bracing for the worst,鈥� he said.
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With regards to strategies in dealing with the slowdown, he said No. 1 is the job sharing program, which saw use during the last slowdown. It saved some companies.听

鈥淭he industry won鈥檛 shut down 100 per cent. We will drill wells and we will hydraulically fracture and complete them. It鈥檚 not like every piece of iron is 小蓝视频 pulled out of the field,鈥� he said.
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鈥淚t鈥檚 not going to stop dead. There will be work. But how can you keep your people we asked? When I was on the rigs we would work two week shifts instead of three weeks to give another crew two weeks. It鈥檚 not as big a paycheque, but you get a paycheque.
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鈥淲e鈥檙e talking wage rollbacks, and obviously no bonuses 鈥� just tightening things up.鈥�
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Letters from oil and gas producers demanding price cuts sent 鈥渂ad ripple effects through our members,鈥� Sakeld said.听

鈥淚 worked for a drilling company once upon a time. In 鈥�08-鈥�09 we took wage cuts. I was in management. In the downtown core week 鈥� took wage rollbacks and a week off without pay.鈥澨�
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PSAC鈥檚 members are trying to avoid layoffs, but there comes to a point where they have to, he noted.
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If employees working together to lower costs, there won鈥檛 be a company, he noted in some cases. 鈥淚f these companies are forced to take 30 per cent cuts on their invoices and they have to close their doors, you鈥檙e going to go from 100 service companies to three. You know what鈥檚 going to happen to the producers when things fire up again 鈥� they鈥檙e going to be paying triple time back for that little exercise. That鈥檚 part of the message we need to take (to the producers). We need to work together 鈥� companies, employees, to manage the sector.
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鈥淚鈥檝e been there, five times. We come out the other end better; stronger, more efficient, faster, safer, effective. It鈥檚 a correction. It鈥檚 an ugly correction. It鈥檚 not pretty in a lot of areas. But we do improve on the other end.鈥�
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Sakeld offered his take on how this downturn compares to those five previous times.
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鈥淚t has the potential to be a bad one. The reason I say that is some of the reports and the sessions I鈥檝e been to (say) it鈥檚 essentially a price war, with Saudi Arabia on one side and a bunch of other producers on the other,鈥� he said.
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He noted they鈥檙e trying to re-assert OPEC鈥檚 position in the industry. But he acknowledges North America鈥檚 technology has unlocked millions of more barrels of production.听
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鈥淚t鈥檚 interesting. Yes, North America, because of our technology 鈥� and I鈥檓 proud of what we鈥檝e done with multi-stage hydraulic fracturing and horizontal drilling. That鈥檚 what鈥檚 opened it up, and our sector has played a significant factor in developing that technology and creating what we have here today. But having said all that, we ramped up, we鈥檝e pushed back demand, but we鈥檙e not their only customer. They鈥檝e got Asia and India. At the end of the day, they鈥檙e the guys with the foot on the gas pedal. They increase it or decrease it. They always have been the swing. They can adjust and make their money,鈥� Sakeld said.
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