The current oil slump is the worst downturn in the history of the oil and gas industry, according to Eric Carre, executive vice president of global business lines at Houston-based Halliburton Co.
The global oil slump has been “quite painful” for Halliburton, said Carre at a Sept. 7 luncheon on the state of the energy business in Houston put on by the Commercial Real Estate Women's Houston chapter.
To date, Halliburton has cut between 2,000 and 3,000 jobs in Houston and a total of 35,000 jobs globally, Carre said.
The company has roughly 50,000 employees around the world, down from its 2014 peak of 85,000 employees. Between 2015 and 2016, Halliburton had a 28 percent decrease in annual revenue, according to HBJ research.
“We’ve been in this down cycle for around two years,” Carre said. “The last down cycle of this magnitude in 1986 lasted around six months. … We’ve never seen this in the industry, and the consequences are fairly dramatic.”
Overall, the industry has lost around 350,000 jobs and roughly 177 oil and gas companies have filed for bankruptcy, he said.
"You calculate the amount of new production that we have to put on the market in the next five years to offset the decline in production, the new production that is necessary to support new economic development around the world, and we’re going to have to find 20 million barrels a day (of oil), equivalent of two entire Saudi Arabias," Carre said.
Earlier this year, a mega-merger between Halliburton and Baker Hughes Inc. was called off. The deal was expected to close in the second half of 2015. It had been in the works since 2014 and was originally valued at $34.6 billion. It would've combined the world's second and third largest oil field services companies.
On a brighter note, Carre gave a preview of the different technologies Halliburton is working on. The oil giant spends between $400 million and $500 million in technology and new product development, he said.
One product that Halliburton is working on is made of metal, and is able to isolate sections of a well during the hydraulic fracturing process. Within 48 hours, the product completely dissolves, he said.
“It is a phenomenal evolution in terms of material science,” Carre said.
There’s also a new fracturing fluid that’s 99 percent water and sand, and the remaining one percent is made of chemicals that come from food. The chemicals address corrosion, Carre said, and the fluid is completely safe for human consumption.
A visualization room that would allow its operators to draw three-dimensional pictures of what the subsurface looks like, including finding oil, gas, water and more, is in the works.