Tullow Oil to slash workforce as production shrinks
British company hit by series of production and exploration setbacks
Troubled UK oil and gas company Tullow Oil plans to cut staff numbers by a third as it seeks savings of $20m (£15.3m, €18.1m), sources close to the company told Reuters.
The company’s shares have slumped in recent months, losing 75 per cent of their value since November.
The business has been hit with a series of setbacks. In November, Tullow admitted that a major find off Guyana was not as valuable as originally thought because of the low quality of the oil.
On February 4 the business announced that it would conduct an in-depth evaluation into the economics of the find, in which it has a 60 per cent stake.
The company, which focuses on Africa and South America, has also been hit by weaker-than-expected output and disappointing exploration results. In January Tullow started the process of selling some of its stake in oil discoveries in Kenya.
The job cuts, accompanied by pay and hiring freezes, would cut administrative costs by around a fifth. The company also plans to halve its exploration budget.
Announcing a consultation process, a spokesman for Tullow said: “Tullow estimates that the measures will deliver considerable savings and the group's workforce may reduce by approximately a third globally with potential office closures in Dublin and Cape Town among a number of measures to reduce costs and overheads.”
Tullow said production would shrink to around 75,000 barrels per day this year.
Markets reacted positively to the company’s cost-cutting plans, with Tullow shares up by 4.24 per cent at 1pm GMT.
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