Oil majors laying off jobs and cutting expenditures

PETALING JAYA: The oil price slump since June 2014 has heaped pressure on oil majors worldwide to lay off jobs and to reduce their capital expenditures (capex) and operational expenditure (opex) as part of their cost-cutting measures.

Shell had indicated that it will reduce some 10,000 employees after it had acquired BG Group last month for US$53bil (S$74 billion).

It had previously announced an 87 per cent drop in annual net profits, with a profit after tax of US$1.94bil for 2015 compared with almost US$15bil the previous year.

The enlarged Shell-BG group is expected to spend US$33bil for capex next year.

Its capital investment for the first nine months of 2015 amounted to US$21bil, close to a 25 per cent reduction from the previous year.

ExxonMobil which had recently announced US$16.2bil profit for 2015, a reduction of 50 per cent from its 2014 figure of US$32.52bil, did not indicate of any job layoffs but had said that it would cut its 2016 capital budget by 25 per cent to US$23.2bil, from the US$31.1bil spent in 2015.

BP on the other hand, planned to cut around 7,000 jobs over the next two years.

It would also limit its capex to between US$17bil and US$19bil a year through 2017.

It had reported one of its worst annual loss of US$6.5bil for 2015.

US producer ConocoPhillips reported a net loss of US$4.4bil, compared with earnings of US$6.9bil in 2014.

Spanish energy company Repsol SA reported a net loss of €1.2bil (S$1.8 billion) for 2015 versus a net profit of €1.6 bil in 2014.

In October last year, it was reported that the Spanish oil company would lay off 1,500 staff and sell billions of dollars worth of assets and trim its capital spending over the next five years from US$6.7bil to US$4.1bil by 2020.