Restructuring in the Canadian petroleum industry, including cuts of more than 12,000 jobs, has produced significant productivity gains, a Calgary analyst says.
A report by Ziff Energy Group is based on surveys of 29 large, medium, and small companies.
The study says staffing levels were down 3-5% in 1991 across the industry with administrative departments taking the biggest cuts up to 10%. Operating staff cuts averaged 5%.
Restructuring efforts have increased productivity by 19% in medium size companies based on a ratio of oil and gas production per employee. Large companies increased productivity 7% by the same yardstick.
Ziff Energy's Paul Ziff said the productivity gains are the start of a positive trend, and the industry is beginning to make some progress. He said companies have a compelling reason to continue a drive for greater efficiency because returns on investment are so low that access to capital is drying up. Ziff said most large staff cuts may be over, but there will be some reductions as companies continue to fine tune their operations.
The study said restructuring efforts will continue. They will include reductions in middle management, simplifying organization, setting benchmark performance targets, dividing large company operations into small business units, selling noncore assets, and handling administrative functions by contract.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
