As exploration and production activities ramp-up offshore the South American country of Guyana, US oil major ExxonMobil plans to reduce staffing levels across a number of its European affiliates as part of an extensive global review outlined during the company’s second quarter earnings call.
On September 30, the company sanctioned its 3rd development offshore Guyana pegged at US$9 billion. But while the operations offshore that country remain resilient, the company has had to reassess its $30 billion-a-year plan to rebuild an aging worldwide portfolio after cash flow evaporated and threatened its vaunted dividend.
The company said proposed changes across Europe are subject to local information and consultation processes as applicable in each country and result from insight gained through reorganizations and work-process changes made over the past several years to improve efficiency and reduce costs.
It said the impact of the global pandemic on its products has increased the urgency of the ongoing efficiency work.
“It is anticipated that up to 1,600 positions would be impacted by the end of 2021 across the company’s affiliates in Europe. Country-specific impacts will depend on the company’s local business footprint and market conditions,” ExxonMobil said.
The company pointed out that Europe remains an important market, as evidenced by recent major investments. However, it said significant actions are needed at this time to improve cost competitiveness and ensure the company manages through these unprecedented market conditions.
Experts have said exploration and production operations which have clear strategic drivers, robust economics and operators with strong balance sheets are advantaged and likely to remain active.
“Advantaged deepwater oil in places like Guyana and Brazil…will progress,” Rob Morris, from consultancy group Wood Mackenzie, has pointed out.
The International Energy Agency believes the pandemic has paved the way for the largest decline of global energy investment in history, with spending set to plummet in every major sector this year.
