Maersk Oil Cuts More Jobs

Maersk Oil will cut its workforce by about 12 percent as part of the company’s plan to reduce operating costs by 20 percent by the end of 2016.

About 540 employees will lose their jobs in the move. Maersk Oil, which has a total workforce of about 4,500, has shed 1,250 employees this year amid weak oil prices.

Maersk Oil CEO Jakob Thomasen said in a statement:  “We are operating in a materially changed oil price environment and have taken necessary decisions to reduce activity levels through 2015, and ensure we focus where we can see adequate returns from our most robust projects.”

Developing the Culzean gas field in the U.K. North Sea is among the projects Maersk Oil will focus on. On August 31, the U.K. Oil and Gas Authority cleared the company to develop the field.

Culzean is the largest gas field sanctioned in the U.K. since East Brae in 1990 and will produce about five percent of the U.K.’s energy demand by 2021. The Culzean field is expected to produce about 90 thousand barrels of oil equivalent per day and create 400 jobs.

In September, Maersk Oil stated that it would cut about $1 billion off its annual budget for capital expenditures (capex).  The company said it will have long-term capex in the range of $2 billion to $4 billion a year compared with the previous range of $3 billion to $5 billion. The new forecast does not include funds to be spent on acquisitions, which the company says it is still pursuing as a critical means of replacing reserves.

Maersk Oil is a unit of the A.P. Moller-Maersk Group and operates fields in the U.K., Denmark, Qatar, Kazakhstan, the U.S. Gulf of Mexico, Algeria and Brazil with total production of 550,000 barrels of oil per day.