Chevron is giving the slip to 800 of its employees in the Permian as part of a larger cost-cutting drive that will see its global workforce reduced by a fifth by 2026.
The news follows a round of 600 layoffs in California as the supermajor seeks to streamline its business in a challenging environment. Chevron just got its license to produce oil in Venezuela revoked, while it remains embroiled in a dispute with Exxon over the acquisition of Hess Corp. and its Guyana assets.
The Trump administration will grant Chevron the right to keep its operations in Venezuela after its sanction waiver expires in June, but the company will be banned from producing oil in the country or expanding its business there.
Also this week, a private arbitration panel in London began hearing the arguments of ExxonMobil and Chevron regarding their rights to one of the world’s most lucrative oil projects. Guyana’s Stabroek block has an estimated 11 billion barrels of oil in place discovered so far by the consortium of ExxonMobil, U.S. Hess Corp, and CNOOC of China.
The high-volume, low-cost development offshore the South American country, which started production just five years ago, is already pumping more than 660,000 barrels per day of crude. Exxon is the operator of the block with a 45% stake. Hess holds 30%, and CNOOC has the remaining 25% stake.
When Chevron offered to take over Hess for $53 billion, its focus was on the latter’s stake in the Stabroek block. Exxon, however, challenged the deal saying it had right of first refusal for Hess’ stake. CNOOC has sided with Exxon. The dispute could be resolved by the end of this year but it will certainly delay Chevron’s acquisition of Hess. If it ends with a win for Exxon, Chevron may even reconsider its Hess bid.
By Irina Slav for Oilprice.com
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