The Impacts Of Oil Industry Operation and Development Cost Reduction Strategies On The Human Resource Management Components Of The Oil And Gas Sector

7. 15. 2021

It is important to focus on the impact study of cost reduction strategies in the oil and gas sector specifically on the human resources management component, after the end 2014 crisis. The management of production sites and development projects in the sector are directly influenced by cost reduction strategies following the vertiginous drop in oil prices at the end of 2014. The wave of dismissals and job cuts in the sector's staff was felt in the following quarter, with the wave of unemployment not only affecting secondary or primary support processes but also the central “production” processes. Through this article we will try in the context of crisis and crisis management mainly, to understanding the possible impacts of such a difficult situation on the management of human resources of the sector will open the doors to include also the indirect impacts on the other components of the crisis business management and more primarily health management and work safety and ink more deeply on the management of operational risks in crisis.


In an environment of the oil crisis at the end of 2014, all development and exploitation projects were frozen for 2 years, the sudden drop in barrel prices directly influenced long and medium strategies. In terms of energy companies in the world, the new perspectives were the prospects of reducing costs and minimizing expenses of all kinds to limit the disastrous repercussions on the world economy,

The reductions hit the human resources of the sector, as a whole, it was a serious hemorrhage of know-how of an industry which has developed for years skills and considerable degrees of expertise, thus found itself in bankruptcy of resources.

A feeling of instability of internal balance in the sector gave way, productivity was also seriously affected, and this added to the problem or the impact on industrial health and safety of industrial chemical production sites. among the most dangerous. As a consequence of this, there are also the downstream impacts in terms of financial losses, loss of reputation that may arise in the event of an accident or a major catastrophic event.

The subject brings a remarkable theoretical innovation with the integration of crisis management mainly. The study, which affected the human resources component, also opens the opportunity to study the possible and indirect impacts on the other components of the management of the company, specifically the management of health and safety at work, and management of operational risks in crises.

From a practical point of view, this research approach made it possible to set up a decision model in a crisis then be tested later in another field. A strategic decision model that we can develop and which can be will focus on the proactive assessment of stakeholders' expectations in the face of the crisis vis-à-vis the strategic actions to be taken, and even before implementing them, the model is mainly communicative, proactive and based on behavioral predictions of actors facing the crisis.


At the end of 2014, the price of oil had been estimated at four. OPEC, therefore, decided to maintain production in 2011, a barrel was 110 US $ reduced to 28 US $ in January 2016. Saudi Arabia was the forerunner of the fall in prices, but not the sole responsible for the situation, its decisions were geopolitical and regional competition. By refusing any consensus, there was added the consequent drop in production by OPEC, then a slowdown in the Chinese economy, already at a very low level since 2008.

The abundance of supply resulting from competition from new American, Russian and Saudi productions; the context of geopolitical rivalry between Saudi Arabia and Iran, then the slowdown of the Chinese economy are the three main factors of the fall in prices.

Brent prices fell from $ 100 in April 2014 to $ 50 in January 2015. Until the price of the package of crude itself became more expensive than the price of the oil it contained.

These fluctuations in terms of prices are not an exceptional phenomenon in the energy sector led the world economy, sometimes provoked and/or administered as a geopolitical weapon in the hands of governments and regional coalitions for a redistribution of the cards of economic dominance in the world.


Strategies have been put forward by the big oil companies in order to mitigate the impacts of the crisis, mainly strategies for debt reduction, diversification and divestment strategies. Those adopted by the NOCs differed in detail from those adopted by the IOCs.

The activity of international companies in terms of mergers and acquisitions was generally weak between 2008-2015 when compared to other players (independents, service and equipment companies, etc.). IOCs represented less than 1% of the volume of transactions in 2014. In the short term, IOCs continued their divestments in non-strategic assets, but also in the end of the oil chain, and repositioning themselves in the most profitable segments with a downward trend in costs.

In other perspectives, IOCs have also continued their diversification and gradual migration to renewable energy sectors.

The strategic change in the petroleum sector was worrying, but also the situation of the specialized energy labor market was alarming.


Figure 1 : Largest Layoff Events In 2015 For US Energy Sector Companies Only. [1]

Layoff events


Over 441,371 jobs in the oil and gas industry globally were lost during the recession, as of February 10, 2017, the total number of oil and gas layoffs worldwide is 441,371 according to data compiled by the consulting firm based in Houston Graves & Co.

The risk of unemployment and the consequent feeling of insecurity increased the risks to workers' health[2].

4.         CONCLUSION

The issue addressed in this subject revolves around the impact of the 2015 oil crisis and its effects on the economic development of the oil sector in terms of production and the overall development of the industry in question.

We have focused our efforts on highlighting changes in human resource management methodologies in the oil and gas industry.

In the first section, we tried to explain the oil crisis of 2015 - the end of 2014. We focused on the world oil price drop reasons, as well as the conflicts between the member countries of OPEC and non-OPEC producers on the one hand, and slower global economic growth due to slower economic growth in China. Also, the market situation following the crisis, the effects of political and economic management phenomena on the reactions of producers of the world market in terms of price volatility.

The second section was devoted to the strategies of price reduction and the impacts on the management of human resources in the oil industry; we dealt with the growth of feelings of professional insecurity after waves of layoffs, psychological anomalies with the dismissed staff, and work stress among active staff through the multiplication and accumulation of work tasks.

Thus, we examined the guidelines for diversification of specialties, the guidelines for disinvestment, and the maneuvers of debt reduction.

This preliminary study will open the doors to invest more deeply in leading oil sector company’s strategic actions during the crisis, and how to put them into action, the risk study related to the implementation of these strategies, and what may be generating satisfaction or dissatisfaction among stakeholders in the crisis will be the subject of further investigation.


Bibliography (standard format of citations according to international standards):

1.         Amable (B). (R) Barré. (R)Boyer. (1997)Les Systèmes D’innovation A L’ère De La Globalisation. Economica. Paris. Pp68-70.

2.         Analyse En Composantes Principales (Acp), P2,  Wikistat.Fr.

3.         Association Française Du Développement / Groupe Urd. (6 Juin 1999). Planète De Toutes Les Crises : Typologie Des Crises. Journée De Formation & Réflexion. Availble On Site. Www.Afd.Fr

4.         Brigitte Fournier. (1993). L’entreprise En Etat De Choc : Gérer Les Crises Economiques Et Sociales Et Faire Face Aux Médias. Partie 1 : Typologie Et Classification Des Crises. Editions De L'environnement. Pp 88-98.

5.         Charles D. Reese (2008), Occupational Health And Safety Management: A Practical Approach, Second Edition Hardcover,

6.         Christophe Roux-Dufort. (2000). La Gestion De Crise : Un Enjeu Stratégique Pour Les Organisations. De Boeck & Larcier. Pp9,10.

7.         Christophe Roux-Dufort. Marie Nôelle Sicard. Interprétation Par Thierry Libaert. (Décembre 2004).  Crises ; De 10 A 100. Le Magasine De La Communication De Crise Et Sensible–Crises.  Availble On Site. Www.Communication-Sensible.Com.

8.         Claude Fiore. (2006).Supply Chain En Action - Stratégie, Logistique Et Service Clients. Guide Marketing. Pp 22,23.

9.         Clifford Krauss And Stanley Reed - Conocophillips And Occidental Post Losses, Reflecting Oil Price Plunge - The New York Times, Jan. 29, 2015.

10.       Cnbc, Challenger, Gray & Christmas- September 2015 Data.

11.       Dictionnaire Encyclopédique. (2001). Larousse.

12.       Economic Downturns And Population Mental Health: Research Findings, Gaps, Challenges And Priorities, K. Zivin, Ph.D., Department Of Psychiatry, University Of Michigan Usa. 2011.

13.       English Oxford Dictionary 2018, Presenteeism : The Fact To Be Always Present Even If You Are Sick, Antonym Of Absenteism.

14.       From Unemployment To Oil: The Big Unknowns Of 2015 -  On Page Bu5 Of The New York Edition With The Headline, Dec. 28, 2014.

15.       Gérard Lagneau. (9/05/2001). La Part De L'image Dans La Valeur De L'entreprise. Les Echos. Article N°10. Article N°10 - P95.

16.       Gestion De Crises, Mode D’emploi : Herve Renaudin / Alice Altemaire: Liaison Editions 2007. Pp 115-118.

17.       Gilles Guerien-Talpin. Francis Grass. Michel Ogrizek. Interprétation Par Thierry Libaert. (Décembre 2004). Crises ; De 10 A  100.  Le  Magasine  De  La  Communication  De  Crise  Et  Sensible–Crises.  Disponible  Sur  Le  Site.  Www.Communication- Sensible.Com.

18.       Hair, R. Anderson, R. Tatham, W. Black, Multivariate Data Analysis, 5th Edn. (Prentice Hall International, London, 1998).

19.       Herve Renaudin. (Février 2005). Sortir De La Crise : Une Approche Par Le Marketing Des Services. Le Magasine De La Communication De Crise Et Sensible. Availble On Site. Www.Communication-Sensible.Com.

20.       Insee - L'institut National De La Statistique Et Des Etudes Economiques- France.

21.       Institut Des Hautes Etudes De La Défense Nationale Française. (Janvier 2002). Actions Militaires Et Gestion Des Crises. Rapport De  1ère Phase ; 54ème Session Nationale ; Comité 2. Pp13–15.

22.       Interpretation By : Causes Et Conséquences De La Chute Des Prix Du Pétrole, Guillaume A. Callonico, Geoplitics Expert - 04 February 2016. Http://Monde68.Brebeuf.Qc.Ca.

23.       Iosh Managing Safely, Trainer Notes: Modules 1-4. 2017.

24.       Jérôme Sabathier. Manuscrit Juin 2016 - En Réponse Au Contre-Choc Pétrolier, La Stratégie En Trois Etapes Des Majors Pétroliers : Désendettement, Désinvestissement Et Diversification.

25.       Le Marché Du Pétrole : Fonctionnement, Evolution Des Prix, Effets Pour L’économie Française - Esjouvet.Wordpress.Com,

26.       Les 5 Sources De Non Qualité De Gestion De La Crise Par L’entreprise (H.Renaudin, 2005).

27.       Les Effets D'un Prix Du Pétrole Elevé Et Volatil - Rapport - Patrick Artus, Antoine D’autume, Philippe Chalmin Et Jean-Marie Chevalier. Direction De L’information Légale Et Administrative. Paris, 2010. P.P.26-41.

28.       Marie-Hélène West Phuller. Eveline Gasquet. Interprétation Par Libaert Thierry. (Décembre 2004). Crises ; De 10 A 100. Le Magasine De La Communication De Crise Et Sensible–Crises.  Availble On Site. Www.Communication-Sensible.Com.

29.       Occupational Health Psychology - Edited By James Campbell Quick And Lois E. Tetrick - American Psychological Association Washington Dc - 2001.

30.       Occupational Health Psychology - Edited By James Campbell Quick And Lois E. Tetrick - American Psychological Association Washington Dc - 2001.

31.       Oedc : Organization For Economic Co-Operation And Development - 35 Member Countries, Founded In 1960 To Stimulate Economic Progress And World Trade.

32.       Oil Market Intelligence Et Natixis

33.       Oil Titans National Oil Companies In The Middle East, Valérie Marcel, John V. Mitchell - Chatham House London, Brookings Institution Press - Washington, D.C.  2006. National Oil Company Structures P.P. 277-282.

34.       Oleg Curbatov. (2003). L’intégration Du Consommateur Par Le Knowledge Marketing – Conception, Production Et Consommation  D’un  Produit  Personnel.  Université  De  Nice-Sophia  Antipolis :  Institut  D’administration  Des Entreprises. Thèse Pour Le Doctorat En Sciences De Gestion. Pp 37- 41.

35.       Panorama Articles : Le Retour Des Fusions Et Acquisitions Dans Le Secteur Des Hydrocarbures, 2016.

36.       Patrick Legadec. (1993). La Cellule De Crise: Les Conditions D’une Conduite Efficace.  Ediscience, Paris. Pp 65-66.

37.       Patrick Legadec. (Mars1991). La Gestion Des Crises : Outil De Réflexion A L’usage Des Décideurs. Mcgraw-Hill. Pp138- 149.

38.       Patrik Lagadec. Michael Regester. Interprétation Par Thierry Libaert. (Décembre 2004). Crises ; De 10 A 100. Le Magasine De La Communication  De Crise Et Sensible–Crises.  Disponible  Sur Le Site. Www.Communication-Sensible.Com. 

39.       Petroleum Finance Company (Pfc), S

40.       Rapports Des Compagnies, Institut Francais Petrole Energies Nouvelles (Ifpen)

41.       Reuters, Calculation -  Ifpen

42.       Robert C. Mc, Keith F.W, Sample Size In Factor Analysis, American Psychological Association. Inc-Psychological  Methods, 1999. Vol.4, No. 1.84-99.

43.       Spss.Espaceweb.Usherbrooke.Ca

44.       The Associated Press, World Bank Lowers Expectations For Global Growth In 2015 - The New York Times.

45.       Workers’ Health And Safety Exposed To Crisis, Benchmarking 2014 - Ilo 2014. P.P. 1-6.

46.       World Employment And Social Outlook – Trends 2018.

47.       Www.Markets.Ft.Com/Data/Indices/Tearsheet/Charts

[1] CNBC, Challenger, Gray & Christmas- September 2015 Data.

[2] Occupational Health Psychology - Edited by James Campbell Quick and Lois E. Tetrick - American Psychological Association Washington DC - 2001.

Application for study

Interactive online: