Tullow To Begin Oil Sector Job Purge As Weak Prices Bite


LONDON, Jan 13 (Reuters) - Oil producer Tullow Oil is planning to cut some of its 2,000-strong workforce, a source familiar with the company said, starting an expected avalanche of job losses in the sector as companies struggle to cope with the slump in oil prices.

Oil companies across the globe have been hit by a 60 percent drop in crude prices in seven months, putting them under pressure to find new areas of their businesses where costs can be trimmed.

"Tullow will be a smaller company," the source said, but gave no indication on the number of jobs likely to be cut.

London-listed Tullow Oil employs more than 2,000 people across 22 countries, with its African operations accounting for half the total workforce.

The company has already cut its capital expenditure plans for this year to $300 million, down from $1 billion invested in the first half of 2014 alone.

It has also placed some of its smaller African offshore drilling projects under review in an attempt to rein in exploration costs.

Ratings agency Moody's said it expected staff reductions at integrated oil companies this year as part of their efforts to rein in costs.

Analysts at Barclays predicted that oil majors' capital expenditure will fall by an average of 7 percent in 2015, with a sharper focus on operating expenses, which include salaries.

British oil major BP has already announced a $1 billion restructuring programme that will involve thousands of job cuts. Rival Shell, meanwhile, has said that it will cut 5-10 percent of workers at its Albian Sands mining project in Canada.

(Additional reporting by Dmitry Zhdannikov and Ron Bousso; Editing by David Goodman)

Copyright 2017 Thomson Reuters. Click for Restrictions.


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Reg MacDonald | Jan. 13, 2015
Unfortunate Repercussions Of A Slowing Oil & Gas Industry Whats next? As recent as 2008-2009 the oilfield seen its last cyclical slowdown which incorporated pain and suffering for employees, their families and smaller businesses trying to survive the last recent crisis. As this continues people are losing their houses, personal pleasures, family and relationships through break ups caused by this crisis. The biggest losers here will be the third party contractors and their employees as Oil Companies tighten their budgets reduce their drilling and production projects to sustain survival. Oil Companies switch from exploration to buying a lower price barrel of Oil that will lessen the burden of this crisis for them. Unfortunately others in this industry dont have that option and will carry the burden. I think this time were going to see the major 3rd party contractors fighting for crumbs if the price keeps falling and the signatures for contracts come few and far between. Now looking a head at maybe the next turn around I wonder what the impression will be on those who look at this as a career. Companies will soon begin if not already cleansing the company of its unwanted employees hoping to keep their most valuable asset employees while hoping the price comes back before they will be next on the list. What I see with the work force will be fail me once shame on you fail me twice shame on me syndrome which will drive employees to seek more secure career futures elsewhere. Normally once they leave they never come back except for the earlier cleansing employees who were laid off first and they usually have a vengeance towards the company for their earlier selection. We might see upwards of 1/4 to 1/3 loss of employees and most of those will suffer the consequences of the slowdown. It will be high price less of the market to low price more of the market for some oil producing markets. Labour costs will be the big factor for oil producing countries who drill and process with cheap labour. The only way out of this that I can see is dont become an exporter nor dont become a buyer utilize what you have produced and only produce what you need to prevent cyclical pricing introduced by other oil developing countries. Getting caught up in a price war for market share only burdens the existing exploration which causes hardships and loss of great employees. Whats good for me as a trainer is that I will end up getting some of the 1/4 to 1/3 new employees looking to train for this industry as long as the shrinking rig count doesnt remain to balance out what I discussed in the last paragraph. Unfortunately know matter what we will all take a blow over this and do we as companies want to carry our businesses again through another recent slowdown? Meanwhile what entrepreneur is going to want to invest in such a cyclical market? If you have a short term purpose and know when to get out you might have a glimmer of a chance to reward yourself of the short term gains. Otherwise for the long term approach youre going to take a beaten if youre a private business owner relying on this market for your bread and butter. Saturating the market doesnt help in stabilizing this industry Id rather cruise and stay with everybody rather than speed and lose everybody. This is only my opinion as I see the developments and I hope Ill see it all change for the better especially for those oil patch workers who might be taking the blunt as we speak!!! Reg MacDonald President / CEO Maritime Drilling Schools Limited

Related Companies

Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Sr. Administrative Assistant
Expertise: Secretarial or Administrative
Location: Houston, TX
International Accountant
Expertise: Accounting
Location: Downers Grove, IL
Mechanical Eng
Expertise: Operations Management
Location: Industry, TX
search for more jobs

Brent Crude Oil : $48.6/BBL 1.12%
Light Crude Oil : $46.34/BBL 1.24%
Natural Gas : $2.9/MMBtu 2.35%
Updated in last 24 hours