Oil service companies are poised for one of the worst years in drilling activity in decades. Baker Hughes Inc. expects the global rig count to drop to 1,526 in 1999 from 1,844 in 1998, a 17 percent decrease. By the end of the first quarter, Baker Hughes will reduce its employees by 18 percent, or about 6,700 employees, leaving 29,800 employed. Another big oil service company Halliburton Co. is cutting costs aggressively. It has cut about $250 million in annual operating cost base savings, according to a report by Dain Rauscher Wessels. The company has already laid off 2,300 employees, and by the end of the first or second quarter, the total reduction will total 10,850 people, mostly from Halliburton Energy Services. Head count at Smith International has been reduced by 24 percent from the highs of last year. By the end of the quarter, almost 2,200 people will have lost their jobs at Smith. Employment is expected to wind up at 6,900 at the end of the quarter.
World Oil, an oil and gas industry trade publication, presented its Oil Outlook for 1999 this week. The drilling forecast for the U.S. is down 18 percent to 21,125 wells from 1998's figure. Drilling in Texas will be hit hard with a cutback of 23 percent. And the rig count for the US. could be the lowest in recorded history, averaging about 700 units for 1999