Nine major drillers in Denver are slashing 2015 spending by 30 percent, about $2 billion. Denver movers report that the number of oil rigs running has already dropped by a third in five months, down to 44 at the end of February; according to the oil field services company Baker Hughes.
The cuts come as the price of U.S. oil on the market, has plummeted to $49.61 a barrel from $107.26 in June. Because of a diversified economy and continued big-dollar commitments by operators, the job cutbacks have not had a severe impact on Weld County – the heart of Colorado oil country.
Eric Berglund, CEO of Greeley-based Upstate Colorado Economic Development states that, “hotels and restaurants still look to be full. Beyond drilling, there is a large oil and gas industry presence here.”
There are still thousands of existing wells that need to be serviced, pipelines are being built, and gas processing, and water recycling plants need employees.
Bill Thoennes, a spokesman for the Colorado Department of Labor, stated that, “we haven’t seen any uptick in unemployment claims in the oil and gas sector. This may be something coming down the road, but we haven’t seen it yet.”
Robin Olsen, a spokeswoman for Anadarko Petroleum Corp., stated that, “we are doing our best to maintain our full workforce so we are well positioned as the market returns.”
The gas sector employs about 1.2 percent of the workforce and losses in that sector may be offset by growth in others.