Business

Pakistan energy firms feel brunt of receding oil prices

KARACHI: The oil prices slump has also affected the jobs in Pakistan apart of the adverse impact on the economies of the oil exporting countries.

Pakistan’s largest oil firm OGDCL has decided to keep hundreds of its employees in the reserve pool.

The managing director of the company has complained steep slump in profit will likely result in withdrawal of a number of the perks of the employees.

The fallout of oil slump has made inroads into Pakistan as oil companies and the allied industry are going towards job cuts as a cost reduction strategy to offset a fall in their profitability.

An oil refinery Byco has expressed intention to relieve hundreds of its workers due to financial problems.

It is pertinent to mention that around 10 million workers of the oil companies have lost jobs due to receding oil prices.

Observers said the entire oil and gas sector in Pakistan is experiencing a decline in revenues, while the allied industry including engineering, procurement and construction contractors are losing jobs because the industry majors are no more aggressive in their expansion plans.

Crude oil prices tumbled more than 70 percent since 2014 when the prices peaked above $100/barrel. The downward trend squeezed the revenues and capital expenditures of the oil industry. Globally, companies reacted by cutting overheads, operating costs, research and development or cash outlays like capital expenditures, to conserve cash flows for the future dividend outflows.

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