Oil Search Cuts Workforce by 34%

Sydney-listed Oil Search has reduced its workforce by about 34% to tackle the slowdown created by Covid-19 pandemic, it said on July 1 in a statement.

Full time employees, which include employees and long-term contractors, have been reduced from 1,649 people as of March 14 to 1,222 currently, with a further 137 people transitioning out by year end, it said. Reductions have been made across all locations.

“This has been aimed at ensuring that the company not only has the resilience, capabilities and financial strength to withstand a prolonged period of subdued oil prices, but is also optimally positioned to operate its production assets safely and cost efficiently and progress its world class growth opportunities in Papua New Guinea and Alaska when market conditions allow,” the company said.

Oil Search said other steps were being coordinated to cut costs further. “Dedicated teams are reviewing all capital and development projects operated by Oil Search to identify phasing and cost saving initiatives that can materially reduce the breakeven costs of those projects,” the company said.

Based on the initiatives to date, forecast 2020 production costs are expected to be approximately $10.50/boe (before one-off restructuring costs), compared to prior production cost guidance of $11-12/boe, it said.

In March this year, Oil Search cut its investments in 2020 by 38% in response to the steep decline in oil prices.