Job losses and project cancellations: the new normal?

Oil prices forecast to remain low for near term

BP has cut 300 North Sea oil and gas jobs as a result of falling wholesale prices, Sky News report. The job losses – 200 BP workers, and 100 contractors – all come in Aberdeen. BP reaffirmed its commitment to the North Sea on the news, with its regional president Trevor Garlick saying that “given the well-documented challenges of operating in this maturing region and in toughening market conditions, we are taking specific steps to ensure our business remains competitive and robust.”

At the same time, Baker Hughes said it will make “surgical” cutbacks of 7,000 by March in a conference call this week. Kimberly Ross, Baker Hughes’ CFO, said that “we will proactively adapt to changing market conditions by rightsizing our cost structure.” Jobs will not be the only area in which the careful cuts will occur: “discretionary spending, vendor pricing, and travel are all being cut,” Ross added.

Apache has announced low oil prices have forced it to cut 5% of its workforce, World Oil write. 125 workers will lose their jobs across the globe, the company has announced. “The decision to part with employees is always a very difficult one,” the company said in a statement. And RWE Dea has chosen not to spud a German development gas well. The Volkersen Nord Z7 well has fallen victim to increasing costs and declining gas and oil prices, the company has said.

The sale of Dea will be completed by early March, RWE has said. The unit will be sold to Russian businessman Mikhail Fridman, despite opposition from the UK because of international sanctions following Russia’s invasion of Ukraine. “We will examine the detail of this deal closely to consider its implications, and any action we may need to take,” a DECC spokesman said.

Meanwhile “the LNG industry is suffering from an anxiety attack over falling oil prices and uncertainty around global growth,” say Sanford C. Bernstein in a new report. Many US LNG plants will not be built due to dampened demand.

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