Veteran oil man relaxed about latest price drop

The need for oil and gas to fuel transport systems and power stations won't go away. Photo / File

Oil bobbing around the US$50 mark was the "the elephant in the room" at the Advantage New Zealand Petroleum Summit, and among exhibitors outside the conference veteran oil man Sean P Flanagan says he's seen it all before.

"It's my fourth downturn since I got out of school - we will get through this," said Flanagan, the Asia Pacific director for TDI Brooks International.

His company offers a range of services to oil explorers around he world, ranging from chemical analysis of the sea floor to monitoring of mussels around the the United States coast.

While he's optimistic about future oil prices the industry is hurting right now.

"We're definitely being affected - we're between a rock and hard place with oil companies squeezing you and suppliers squeezing you."

Prices were suffering not only because of the surge in supply but the fall in the percentage increase in demand, said Flanagan, who has been in the industry for 35 years.

For the shale oil sector to break even in the US prices had to be at least US$60 a barrel.

Rigs were being shut down - "Right now there's a lot of equipment going into the barn."

But the need for oil and gas to fuel transport systems and power stations wouldn't go away. As Flanagan sees it the world is addicted to hydrocarbons.

"People like a cold beer in summer and their furnace on in winter," he said.

New Plymouth-based Intergroup provides several oil and gas services, including tank cleaning.

"We've felt the pinch - a lot of major clients [including] STOS (Shell Todd Oil Services) and Vector are not spending the money. It's quite challenging," said business development manager Anthony Vaoga.

But the company has a broad client base - it cleans out dairy tanks and has local government work that still has to be done.

England-based Gardline offers marine mammal monitoring, among other services.

Environmental business development manager Joana Cid Torres said the global company was having to redeploy its ships around the world to chase work. The industry was slowing down in the North Sea but there was work off South America.

Gardline had done mammal observation work last summer off New Zealand and was now confident enough to open an office in Wellington.