Oil jobs go as ExxonMobil announces voluntary redundancy program
Oil major ExxonMobil has started a voluntary redundancy program for its Australian staff.
Oil major ExxonMobil has started a voluntary redundancy program for its Australian staff after warning of unprecedented market conditions following the oil rout earlier in the year.
Exxon, which has put up for sale its 50 per cent stake in the Bass Strait fields off the Victorian coast, said the move followed an extensive review of its current and future project work.
“Employees who elect to take part in the voluntary program will be asked to offer expressions of interest through September. The program is being offered to all employees in Melbourne, Gippsland, Sydney, Adelaide and Perth,” Exxon said in a statement.
“This program will ensure the company manages through these unprecedented market conditions.”
Oil prices collapsed earlier this year as the pandemic slashed travel, cutting demand for the fossil fuel and forcing hefty reductions in spending across the industry.
One of Exxon’s chief rivals, gas giant Chevron, said in May it could cut up to 600 jobs cut due to a ‘perfect storm’ of the pandemic and the slump in crude prices.
In Australia Oil Search shed 600 jobs, a third of its workforce while Woodside Petroleum cut up to 500 jobs at its Western Australia gas plants.
Since the 1960s, Exxon has produced more than 4 billion barrels of oil from Bass Strait, which at its peak was producing 500,000 barrels of oil a day, making it one of the world’s biggest producing regions.
Exxon now produces just one-tenth of the volume of oil it was pumping in the 1980s while its big legacy gas fields – Marlin, Barracouta and Snapper – are also on their last legs.
Although it remains eastern Australia‘s biggest gas player, its share of the market has fallen by about a third in the last few years sparking a costly hunt for new resources.
It considered backing a potential LNG import plant to meet market demand, but dropped that plan in December blaming insufficient interest from customers to sign long-term contracts.
Exxon operates the Altona refinery, one of only four refineries still operating in Australia, with a COVID-19 collapse in fuel demand hiking pressure on the sector and sparking a Morrison government review over how it might step in to protect the facilities.
Australia’s LNG sector has blown up more than $20bn in writedowns after French energy giant Total took a $US800m ($1.1bn) hit, sparking concern high construction costs and a lower oil price outlook may derail spending needed for a next wave of investment.
Total, which owns stakes in Inpex’s $US45bn Ichthys gas plant in Darwin and Santos’ $US18.5bn GLNG export project in Queensland, blamed “giant projects with high construction costs” and lower oil price assumptions for the impairment.
Over $22bn has now been written off on projects run by Woodside Petroleum, Shell, Origin Energy and Oil Search so far in July as some of the nation’s biggest gas producers slash their assumptions for oil amid COVID-19 uncertainty.
Australia’s $200bn LNG spending spree in the last decade has catapulted the country into the world’s largest gas exporter but most projects have suffered cost blowouts and delays, trimming returns for some of the world’s biggest energy producers and raising doubts over the appetite of majors to bankroll a next wave of projects.