What a Year, This 2020! The P2 Principle

Kenny Jordan

As many of us attended the February winter meeting in Galveston, Texas, I don’t believe anyone anticipated the twists and turns of not only the industry, but life as we knew it then.  We were able to visit without “social distancing”, wearing face masks, and we thought Corona was a beer and not a virus!  And then it happened, the world changed in an instant it seems.  Oil prices tumbled, activity along with it, companies experiencing financial distresses, massive layoffs, and it wasn’t just our industry but the nation.  Prosperity to poverty (the P2 principle), it happened in an instant.  I am fairly certain that when you were finishing off your 2020 budgets at the end of 2019, no one’s crystal ball saw this as an option, nor the speed at which it happened.

Services are coming back, not the speed or pace that is needed to sustain most of your companies, but it is returning.  More important than the work, is the price you need to get for the work you provide.  Every service company is under tremendous pricing pressure from your customers, which is passed on to suppliers as best everyone can tolerate.  We’ve seen companies go completely out of business, bankruptcies, mergers, selling and stacking of equipment, inability to pay for products and services, and the list goes on.  I don’t need to remind you of these, you live it every day.

But the important aspects of everyone’s business remains on your most important asset, the people.  Keeping employees safe, providing them the proper training and equipment, should be a priority for all companies.  As companies bring field employees back off of furloughs, many have been sheltered in place and may not be in the work shape they were before the furloughs.  Keep that in mind.  Injuries such as sprains and strains may become more prevalent for those employees.

So the past is done, it is what we do for the future that matters now.  This industry will survive, it always has after every downturn.  No matter what anyone says, the world would come to a halt without your services in this day and time.  There is no magic switch or ‘drop dead’ date where oil and gas ends, and renewables begin.  It usually doesn’t look the same as it did before a downturn, but lessons are learned each time they happen.  The old saying said, “God grant me one more boom, I promise not to ‘piss’ it away”, is just a saying.  Somehow the industry manages to do so every time, but unfortunately it is usually out of the control of you, the service company.  You react to market conditions dictated by your customers, government regulations, or foreign influence, and usually a combination of all of the above.

Stay strong, stay motivated, and understand that anyone trying to predict activity or the price of oil in 2021, has pretty much the same crystal ball as you, and they are all fairly opaque!

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