Page 4 - DMEA Week 25

DMEA COMMENTARY DMEA

Aramco looks to retrench

after the oil price collapse

The oil giant is looking at making staff cuts and is pulling back on developing
its oil and gas deposits

SAUDI ARABIA THE world’s biggest oil-producing company, owing to the coronavirus (COVID-19) pan-
Saudi oil giant Aramco, has started laying off demic and the oil price crash that Saudi Arabia
WHAT: hundreds of employees – mostly foreign staff itself helped to worsen with the oil price war in
Saudi Aramco to pull – across several divisions in response to the oil March.
back on commitments. price crash. The Saudi oil giant is not the only major oil
Aramco, which employs nearly 80,000 peo- firm to slash jobs in order to cut costs during this
WHY: ple, annually revises down its staffing, but this crisis.
The drastic plunge in year’s job cuts are larger than before, Bloomb- Earlier this month, supermajor BP said
revenue resulting from erg’s sources said, while Aramco commented in it would axe 10,000 jobs, or around 15% of its
the oil price fall has the report that it was not providing at this point workforce.
hit its balance sheet. details about the actions it had taken to boost
competitiveness and resilience. Brakes go on
WHAT NEXT: The job losses were said to be mostly based Meanwhile, the world’s biggest oil exporter is hit-
Further details of staff on performance, and similar cuts happen every ting the brakes in developing some of its crude
lay-offs are likely to year. However, this year’s cuts seem to be bigger and natural gas deposits, idling two offshore
become known soon. than normal, and one source estimated that 500 drilling rigs as the coronavirus batters energy
people had been laid off. use.
“Aramco is adapting to the highly complex State-run producer Saudi Aramco has sus-
and rapidly changing business environment,” the pended work at the two platforms for about a
firm said in a statement. “We are not providing year, according to filings from the contractors.
information regarding the details of any action The producer is also quoted as having delayed a
at this time, but all our actions are designed to related $18bn oil and gas expansion project by at
provide us more agility, resilience and competi- least six months.
tiveness, with a focus on long-term growth.” In early May, offshore drilling contractor
Saudi Aramco’s first-quarter net income Noble Corporation said that its jack-up rig Noble
dropped to $16.66bn from $22.2bn for Q1 2019 Scott Marks, working at the Marjan field in the

P4 www. NEWSBASE .com Week 25 25•June•2020