Maersk Oil to Lay Off 160 Employees

maersk
File image courtesy Maersk Oil

By MarEx 2017-01-09 18:48:57

Maersk Oil announced Monday that it would be reorganizing its core Danish Business Unit, consolidating all employees at one location and eliminating 160 positions. The first phase of reorganization will be completed in the first quarter. 

“What we are announcing today will ensure our long term future in a sustainable manner and it is a step in our efforts to support the Maersk Oil North Sea ambitions," said Patrick Gilly, managing director of Maersk Oil DBU. "The simpler organisation enables us to operate in a leaner and more integrated way with a maintained focus on creating maximum value from safe operations of the mature fields in the Danish North Sea.” 

Maersk Oil has been cutting back on overhead, staffing levels and exploration activity throughout the past year. The energy unit of shipping conglomerate Maersk Group is experiencing the same difficult conditions as the rest of the offshore oil industry, but in addition, it faces the loss of the "cornerstone of [its] business" – the Tyra facilities in the North Sea and the Al-Shaheen project in Qatar. If both Tyra and Al-Shaheen are subtracted from Maersk Oil's total production, it would reduce the firm's output by roughly one third (based on 2015 numbers and before accounting for new assets coming online).

Maersk recently said that despite major investments, continued production at Tyra would be unsafe due to new knowledge on storm wave impact. The firm lost its bid to renew a 25-year contract Al-Shaheen last July, and the field's operation will be taken over by Total and Qatar Petroleum instead. 

Maersk Group announced plans to spin off its energy businesses in September, and as of November it was said to be in talks with DONG Energy about merging the two firms’ petroleum divisions. Inside sources say that the negotiations ended mid-December when Maersk and DONG failed to reach an agreement on price.