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2016 was a tough year for most players in the industry, though the Oil market continues to face growing challenges, 2017 would be the year of recovery. With OPEC finally agreeing to cut oil production, oil prices have increased however would demand levels be sufficient to continue to drive prices upwards? In the US, an increase in domestic production as well as shale production may affect oil prices. However, a hike in oil demand across Asia may just drive prices upwards.
Despite tough market conditions, exciting times are ahead as we see some firms going into joint ventures and buying over investments or assets while others are shedding assets. Macquarie is planning on purchasing Cargill’s oil business, China’s Sinopec was close to buying Chevron’s South African assets and most recently have considered to sell their shares in Hong Kong and Shanghai. CEFC has most recently signed a deal with Dongming Petrochemicals in hopes of improving bottlenecks in logistics in the oil sector. BP has plans to enter Mexico’s retail gasoline market adding another revenue stream. On the other side of the spectrum, Shell has decided to divide their refineries and other Motiva assets. ConocoPhillips has agreed to sell their oil and gas assets to Cenovus in Calgary.
From the hiring front, organizations continue to keep headcount lean. HR teams are re-designing innovative methods to solve hiring requirements whilst keeping cost low. The conventional method has been transferring staff from global offices, however some firms have adopted a more hybrid approach by creating new functions within the organization. Most firms are also adopting the “graduate programmes” approach mirroring the likes of Trafigura and BP where they look towards hiring fresh graduates to groom the next generation of talent organically.
We continue to see employers struggling to attract and retain staff especially within some Asian firms. Despite the slow economic growth, companies are investing in revamping their compensation and benefits. Historically the end of Q1 tends to be a performance of musical chairs amongst traders, would this year be any different?