Money Matters, Simplified.
Chevron to cut 2000 jobs this year
by Jaspreet Virk - March 10, 2010 - comments
In order to cut costs, Chevron, which currently has 60,000 employees worldwide, is expected to lay off 2000 workers from crude-oil refining, retailing, and marketing business.
Chevron Corp, the second-largest U.S. oil company by market capitalization, will continue its cost-cutting spree this year as its refining margins are continuously shrinking.
The San Ramon, California-based company had cut operating expenses by 15 percent or $3.9 billion last year following sluggish fuel demand.
As the oil demand has not picked up, Chevron is planning to cut spending by $1 billion this year.
Cost cutting measures
In order to cut costs, Chevron, which currently has 60,000 employees worldwide, is expected to lay off 2000 workers from crude-oil refining, retailing, and marketing business.
It had laid the same number of workers last year after employing 9,000 workers in 2008. Job cuts are likely to continue in 2011.
The company is also considering asking for bids for some of its assets in Europe, which will include its refinery in Pembroke, Wales. This facility can process 210,000 barrels of crude in a day.
It is also expected to seek buyers for its lubricants and marketing business in Central America and the Caribbean.
“Chevron has held a long-term view favoring aggressive upstream investment, and the company is poised for another decade of upstream growth. We expect a substantial production increase mid-decade as our portfolio shifts toward natural gas and Asia." -- John Watson, Chevron's chairman and chief executive officer
Over all, the expenditure on refinery could be slashed by 23 percent this year.
Mike Wirth, Chevron's executive vice president for global downstream, said, "Market conditions are likely to be difficult for the next several years.
“We intend to further concentrate our downstream portfolio in North America and Asia-Pacific. These are markets in which we have our greatest competitive strength.”
Chevron poised for future growth
Despite revenue margins falling, the company said, “2009 was an outstanding year.”
Highlighting its performance, Chevron’s spokesperson said that oil and gas production increased seven percent last year.
Even in exploratory drilling, it witnessed 57 percent success rate. Further, the company added 1.1 billion barrels of net proved reserves, which replaced 112 percent of company’s production.
Considering the good performance in 2009, Chevron is upbeat about posting strong results this year.
In a statement, John Watson, Chevron's chairman and chief executive officer, said, “Chevron has held a long-term view favoring aggressive upstream investment, and the company is poised for another decade of upstream growth. We expect a substantial production increase mid-decade as our portfolio shifts toward natural gas and Asia."
Over the next three years, company’s 25 projects with investment worth $1 billion are expected to receive final investment decision.