Oil braces for Trump ban fallout

Bloomberg

Oil-services giant Halliburton Co. told employees to stay put. Another global oil company is reconsidering whether to place a crude trader in Houston. And universities that train energy workers across the country estimated that hundreds of students may be affected.
Of all the energy sectors that may feel the pain of President Donald Trump’s order to temporarily ban people from seven majority-Muslim countries, oil and natural gas companies — industries he vowed to help during his election campaign — stand to be hit the hardest. On Monday, energy companies led declines in the Standard & Poor’s 500 Index as investors weighed Trump’s first week in office.
“Oil and gas is going to have the most heartburn from this,” Michael Webber, deputy director of the Energy Institute at University of Texas at Austin, said by phone. “Other parts of the energy sector, like the electricity sector, are more domestically situated with its workforce and its assets.”
Just last week, Trump said during a speech that he’d work to “unleash the full power of American energy.” On Monday, those energy companies — from oil and gas explorers to electric utilities — withheld comment while working to assess the impact of his immigration order on their businesses.
Halliburton warned workers not to travel to the US if they are from any of the countries named in Trump’s immigration ban signed last week. The order targets those from Syria, Iraq, Iran, Sudan, Somalia, Yemen and Libya.
“The company is notifying employees of these nationalities that travel to the US is inadvisable during the travel restriction period,” Lawrence Pope, Halliburton’s executive vice president of administration and chief human resources officer, said in an e-mail to employees.
The four worst performers in the S&P 500 at 4:36 p.m. New York time on Monday were oil and natural gas companies. The S&P Oil & Gas Exploration and Production Select Industry index was down 2.9 percent.
San Ramon, California-based Chevron Corp. said in a statement Monday that it’s still reviewing the White House’s executive order, adding that it “values the contributions” of all employees, regardless of their countries of origin or religion.
Monday was “a reversal of the initial trade that was based on the idea that Trump would be a traditional Republican, and that his anti-immigration and trade restructuring promises were just to get elected,” Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $6.1 billion, said by telephone.
Energy companies may think twice about basing jobs in the US, said George Stein, managing director of New York-based recruiting firm Commodity Talent LLC. Stein said
he knows of one “international oil company” that’s already recons-
idering posting a new crude trader in Houston.
The firm may instead place the job in Latin America, said Stein, who declined to name the company but said it was one of his clients. Some companies “will be able to meet their hiring needs if a non-US citizen is the best choice by installing them in London or Singapore or Sao Paulo or Calgary,” he said.
FUTURE WORKERS
Another unintended consequence: The countries targeted by Trump’s ban may end up retaliating by refusing to work with US oil and gas companies, according to University of Texas at Austin’s Webber. Supervisors in Houston could be prevented from visiting employees and clients in nations affected by the executive order, he said.
Iraq’s parliament has already urged its government to bar US citizens from entering the country in response to Trump’s entry ban. Halliburton and Exxon Mobil Corp. are among US energy companies that do business there.
Trump’s ban could have long-lasting consequences for the next generation of US energy leaders, Webber said. Massachusetts Institute of Technology, Stanford University, University of Texas at Austin, University of Houston and Texas Tech University — all of which run programs that train energy professionals — have a total of almost 700 students, faculty and scholars from the countries listed in Trump’s ban.

TRADE GROUPS
MIT said Monday that two of its students are stranded abroad and barred from reentering the US University of Texas at Austin and University of Houston were among those that advised affected students to refrain from international travel.
“If the best students in the world aren’t joining the American workforce,” Webber said, “‘then they will go somewhere else.” Major US energy trade groups had yet to take a stance on Trump’s immigration order on Monday.
The American Petroleum Institute, a Washington trade group representing the oil and gas industry, didn’t immediately have comment. The American Fuel & Petrochemical Manufacturers declined to comment, and Edison Electric Institute similarly didn’t have a statement.
Neal Kirby, spokesman for the Washington trade group Independent Petroleum Association of America, said it’s not taking a position and that the impact on the group’s members would be “a company-by-company-specific” situation.
Mark Brueggenjohann, a spoke-sman for the International Brotherhood of Electrical Workers in Washington, said the group doesn’t know how many of its members may be affected by Trump’s order because it doesn’t collect information by nationality or religious affiliation. United Mine Workers of America spokesman Phil Smith said the union hasn’t seen an impact on its members.
The following are responses from those in the agriculture and mining industries: Trump’s order didn’t spur queries by members of the American Exploration & Mining Association, spokeswoman Devon Coquillard said. Newmont Mining Corp., one of the world’s biggest gold miners, said it was still evaluating whether individual employees would be affected. Miners Freeport-McMoRan Inc. and Barrick Gold Corp. and aluminum giant Alcoa Corp. declined to comment, as did steelmakers Nucor Corp. and US Steel Corp.
Equipment supplier Caterpillar Inc. and AK Steel Holding Corp. didn’t respond to requests for comment, and neither the American Iron and Steel Institute nor the United Steelworkers union provided comment. 35 percent of the 441,000 people working in animal slaughtering and processing are immigrants, according to data compiled by the Migration Policy Institute.
Many refugees work in the meatpacking and dairy-farm industries across the US, said Eskinder Negash, senior vice president at the US Committee for Refugees and Immigrants in Washington. During peak season, California’s farming industry collectively employs about 400,000 and relies “fairly heavily” on foreign-born workers, according to Bryan Little at the California Farm Bureau Federation.