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Chevron Corp has plans to cut between 10 percent and 15 percent of its workforce as crude oil prices remain stubbornly low amid the coronavirus pandemic and oversupply.
With oil demand set for a slow rebound in the coming quarters due to the pandemic, Big Oil, along with service providers and small drillers, have been forced to shift gears to trim the fat—and often then some in order to stay afloat.
While oil prices have rebounded somewhat in the last couple of weeks, WTI is still trading down nearly 50% on the year—an untenable situation for most of Big oil and small shale drillers alike. On Wednesday afternoon, WTI was trading at $32.90—down nearly 4% on the day.
“This is a difficult decision, and we do not make it lightly,” Chevron said in a statement carried by Bloomberg. Chevron employs nearly 50,000 employees as of the end of 2019.
It is unclear how the job cuts will affect each location and business segment, the company added.
In separate Chevron news, the company announced today that it is sending home most of its employees for an oil project in Kazakhstan, after a coronavirus outbreak, according to Bloomberg. Nearly 20,000 of its oil workers were sent home this week. Workers were tested for Covid-19 prior to leaving.
Kazakhstan’s chief sanitary doctor told Chevron last week that it may have to halt work on the Tengiz oilfield if management and local authorities could not curb the spread of the Covid-19 disease.
Tengiz is the world’s deepest producing supergiant oilfield and the largest single-trap producing reservoir in existence, according to the Chevron website, which boasts that the surface area of the Tengiz Field is four times the size of Paris.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.