Page 10 - MEOG Week 14

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Petrofac to cut staff by
20%
announcing a range of measures to deal with the downturn, including major cost cuts.
The chief executive said the voluntary redun- dancy programme would be offered to employ- ees for two weeks but said the company could consider compulsory layoffs after that period.
The company also planned a 50% reduction in its planned capital expenditure, Asfari wrote. Petrofac “is likely to have to consider a reduc-
tion in the base salaries and allowances of at least 10percentformanyemployees,”thechiefexec- utive wrote.
The company was also exploring options to use government support to pay employees in countries where a programme had been put in place, he added.
Petrofac said a two-year extension of a US$150 million loan in March 2020 has reduced debt maturities in the next 12 months to US$275 million and that S&P has recently affirmed the Group’s investment grade credit rating. It added that operations and maintenance activity in its Engineering&ProductionServices(EPS)con- tinues in all regions, although travel and socil distancing measures were having a “modest” impact on activity levels.
Petrofac, which operates globally, including with national oil companies ADnOC and Saudi Aramco, had revenues of $5.5bn last year and employs around 11,500 people.™
ComPanIes
OILFIELD services provider Petrofac is launch- ing a redundancy programme that it expects will end up reducing staff numbers by 20% as it seeks to cope with plunging oil prices, according to a source and an internal email seen by reuters.
The British-based company, which said redundancies would be voluntary but could become compulsory if not enough people took up the offer, said it might also consider reducing base salaries by at least 10% for many employees.
“Theoilpriceslumpcanbeexpectedtohavea considerable impact on demand for our services in the short and medium term,” Petrofac Group chief executive Ayman Asfari wrote in the email sent to staff on Thursday. “We must act immedi- ately and decisively to protect the future of our business,” he wrote.
A spokesman for Petrofac, which designs, builds and operates oil and gas facilities, said: “as a responsible company we, like most of the industry, are putting in place a number of inter- nal measures to help us deal with the challenges ofthecurrentenvironment.”
Brent crude lost about two-thirds of its value in the first quarter as demand plummeted owing to measures to halt the spread of coronavirus (COVID-19) and as Saudi Arabia and russia battled for market share, pumping extra oil into an oversupplied market.
Other energy industry companies have been
PoLICy
Iran restarting “low
risk” business activities
following COVID-19
shutdowns
Iran’s President hassan rouhani has announced on state TV that “low risk” business activities can recommence in
most areas of the country with the Islamic republic attempting to cautiously step up
an economic recovery from its severe and ongoing coronavirus (COVID-19) outbreak, IrnA reported on April 5. Activities were due to restart on April 4, but the move would not be introduced in Tehran until a week later, he added.
rouhani did not spell out what he meant by “low risk”, but added that the suspension of “high risk activities” - the running of schools,
neWs In brIeF
universities and various social, cultural, sports and religious events—would be extended to 18 April.
“Two-thirds of all Iranian government employees will work out of the office from Saturday [April 4]... The decision does not contradict stay-at-home advice by the health authorities,” said rouhani.
Iran has experienced the world’s seventh- worst COVID-19 outbreak and the worst
in the Middle East, according to its official statistics. By the end of April 5, the country had lost 3,603 people to the virus, with 58,226 infections recorded. There is a danger that
a surge in cases could lie ahead with many people returning to various cities following the Persian new Year nowruz holiday gatherings.
Despite repeated warnings to people to avoid close confines, videos have surfaced on social media of passengers squeezing into buses in Tehran and other cities.
Tehran Grand Bazaar officially remained closed. however, reports from the ground
suggested that traders were still selling in bulk. Iranians have not responded well to
quarantine consequences especially as many are suffering from financial problems in an economy much strangled by US sanctions. bne
oIL
Construction of oil
products storage terminal
in northwestern Iran
completed
The national Iranian Oil refining and Distribution Company has completed the construction of a new oil products storage terminal in northwestern Iran, semi-official news agency ILnA reported on April 4.
The terminal, in Orumiyeh, has the
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Week 14 08•April•2020