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What’s Next For Oil? No One Seems To Agree

What’s Next For Oil? No One Seems To Agree

While many of the headlines…

U.S. Oil Producers Slash Jobs To Cut Costs

Workers at rig

Two major U.S. oil producers, Occidental Petroleum and Apache Corporation, have started slashing jobs this week as they look to cut costs in the slowdown of the U.S. shale production growth.

Occidental Petroleum began layoffs across the United States this week, the Houston Chronicle reports, as Oxy aims to further cut costs after it bought Anadarko Petroleum last year in one of the biggest oil industry deals in recent years.

Oxy had already cut jobs in a voluntary exit program, but it has now moved to broad layoffs from Denver to the Permian, according to the Houston Chronicle.

“While these (voluntary) programs have been successful and contributed significantly to our goals, we have determined that additional staff reductions are necessary,” Occidental’s chief executive officer Vicki Hollub said in an internal email to employees, as carried by Houston Chronicle.

Occidental has declined to quantify the terminations.

While Oxy made one of the industry’s largest acquisitions last year, it also took on a lot of debt in this transaction, so voluntary exit programs and broad layoffs are not unexpected.

“OXY’s acquisition of Anadarko is a significantly leveraging transaction, adding over $40 billion of debt to OXY’s capital structure at its outset,” Andrew Brooks, Moody’s Vice President, said in August as the rating agency downgraded Occidental’s rating.

Separately, Apache Corporation, based in Houston, is reorganizing operations to slash costs, and is eliminating 270 jobs as it closes its office in San Antonio, the Houston Chronicle reported on Thursday.

The San Antonio office has overseen the Alpine High natural gas production in the Permian, where Apache shut in production last year to mitigate the impact of the extremely low prices at the Waha hub in West Texas.

The latest layoffs come after Halliburton cut jobs, twice, last year, as it slashed jobs in Oklahoma, Colorado, New Mexico, North Dakota, and Wyoming.

By Tsvetana Paraskova for Oilprice.com

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