Louisiana's oil and gas industry continues to suffer during the economic crisis triggered by the coronavirus and depressed prices, with thousands of workers filing for unemployment benefits and two companies filing bankruptcy.
Professional Pumping Services in Carencro and SMI Companies Global in Franklin both filed for bankruptcy in May, victims of a depressed industry after Saudi Arabia and Russia dumped too much oil on the market and the coronavirus pandemic killed demand for oil.
Industry advocates have warned that more than half of the state's producers could be facing bankruptcy.
Economy: Louisiana faces long economic recovery, and Lafayette and Houma regions may be longer
Louisiana Oil and Gas Association President Gifford Briggs said more oil-related business closures are likely unless the state reopens the economy and creates a more hospitable environment for oil producers.
"As the industry faces an unprecedented crisis, it crystalizes the fact that Louisiana’s legal climate, regulatory framework and tax structure form an untenable, unsteady foundation for the independent oil and gas producer in this state,” Briggs said. “Sadly, more closures are on the horizon, which is why it is critical that we open the economy safely as swiftly as possible."
As of June 6, the mining industry — which includes oil and gas extraction — has had more than 9,800 first-time unemployment claims since Gov. John Bel Edwards issued his stay-at-home order in March. That's about 28% of the average employment for the industry across Louisiana in 2019.
The industry also has had 5,300 continued unemployment claims, or about 15% of 2019's mining workforce in the state.
Related: Amid coronavirus, Louisiana oil and gas workforce sees 23% layoffs, wells shut, fear more
Earlier this year, prices dropped well below $0, as producers had virtually no market to sell their oil. While the situation has improved recently — prices were around $40 a barrel Tuesday afternoon — companies were hit hard by the high supply and low demand for much of the year. For much of the early part of 2020, prices were around $20.
According to a survey by LOGA in May, more than half of oil and gas producers said bankruptcy was likely and they had already reduced their workforce by about a quarter.
Professional Pumping Services filed for Chapter 7 bankruptcy, liquidating some of the company's assets to pay off its creditors. According to its filing, the company has about $3.5 million in assets and owes about $750,000 to various entities.
The company owes several parishes for unpaid taxes, including nearly $10,000 to Lafayette, more than $5,600 to Vermilion, nearly $2,000 to Acadia, and nearly $900 to Iberia.
SMI Companies filed for Chapter 11, which allows a company to reorganize itself to pay off creditors. The company has about $21,000 in assets and nearly $1.6 million in liabilities.
COVID-19 fallout: As Lafayette businesses struggle to recover, state and local grants offer help
Acadiana's economy has tiptoed away from its reliance on the oil and gas industry in recent years, although it remains one of the region's economic drivers. From 2015 to 2018, the Lafayette Metropolitan Statistical Area went from 96 oil and gas extraction establishments to 67. In 2015, the industry produced more than $256 million in average wages. In 2018, that number was down to $136 million.
But oil and gas jobs are more than six times more concentrated in the Lafayette area than the national average. Oil and gas wages are also five times more concentrated than the national average.
LOGA and other industry advocates had pushed for several measures during the regular legislative session. These measures, including severance tax relief and an end to coastal lawsuits, have been long-standing items on the industry's wish list. Advocates argued they were necessary to keep producers afloat.
COVID-19: Louisiana coronavirus: How state residents are affected by delaying Phase 3 reopening
Many of these items stalled as the session came to a close, and some legislative leaders said they wanted to wait until the budget was addressed in the special session before changing severance taxes.
"Additionally, we must take bold steps to improve Louisiana’s competitiveness by addressing the government-sponsored coastal lawsuits and the highest severance tax rate on oil in the continental United States," Briggs said. "Only then will we be able to turn the tide on jobs, investment, and families leaving our state to work in the oil fields of Texas and New Mexico.”
In April, Halliburton announced it would be closing its facility in Broussard and laid off 36 employees.
"industry" - Google News
June 24, 2020 at 05:43PM
https://ift.tt/3fTGWic
Unemployment claims, bankruptcies are troubling signs for Louisiana's oil and gas industry - Daily Advertiser
"industry" - Google News
https://ift.tt/2RrQtUH
https://ift.tt/2zJ3SAW
Bagikan Berita Ini
0 Response to "Unemployment claims, bankruptcies are troubling signs for Louisiana's oil and gas industry - Daily Advertiser"
Post a Comment