Chevron Corp plans to cut its workforce by between 10% and 15% as crude oil prices remain stubbornly low amid the coronavirus pandemic and oversupply.
With oil demand expected to rebound slowly in the coming quarters due to the pandemic, Big Oil, as well as service providers and small drillers, were forced to shift gears to reduce fat – and often some to stay afloat.
While oil prices have rebounded somewhat in the past two weeks, the WTI continues to drop almost 50% over the year, an untenable situation for most large oil drillers and small shales. WTI was trading at $ 32.90 on Wednesday afternoon, down almost 4% on the day.
“It is a difficult decision, and we do not take it lightly,” Chevron said in a statement released by Bloomberg. Chevron employed nearly 50,000 people at the end of 2019.
It is not clear how the job cuts will affect each location and business segment, the company added.
In news from Chevron, the company announced today that it is sending most of its employees home for an oil project in Kazakhstan after an outbreak of coronavirus, according to Bloomberg. Nearly 20,000 of its oil workers were sent home this week. The workers were tested for Covid-19 before leaving.
Last week, Kazakhstan’s chief medical officer of health told Chevron he may have to halt work on the Tengiz oil field if management and local authorities cannot stop the spread of Covid-19 disease.
Tengiz is the world’s deepest supergiant oil field and the largest single-trap production reservoir in existence, according to the Chevron website, which boasts that the area of the Tengiz field is four times that of Paris.
By Julianne Geiger for Oilprice.com
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