Connect with us
nairametrics

Energy

Exxon Mobil to cut 14,000 jobs as pandemic hit oil demand, prices

Exxon Mobil announced it will slash its global workforce by 15% over the next two years, as it struggles to preserve dividends.

Published

on

Exxon Mobil to cut 14,000 jobs as pandemic hit oil demand, prices, ExxonMobil to Divest oil fields in Nigeria, Domestic oil companies

Exxon Mobil Corp on Thursday, October 30, 2020, announced that it will reduce its global workforce by 15% by the end of 2022 – an unprecedented culling by North America’s biggest oil explorer, as the coronavirus pandemic hits energy demand, prices, and struggles to preserve dividends.

The job cuts are expected to include 1,900 U.S. jobs – mostly in Houston, the headquarters for its US oil and gas businesses – as well as layoffs previously announced in Europe and Australia and reductions in the number of contractors, some of which have already taken place.

READ: Exxon Mobil, Chevron record their worst losses in history

READ: Presco Plc projects N24.53 billion turnover in Q4 2020

This was disclosed in a statement that was released by the energy giant on Thursday, October 30, 2020.

GTBank 728 x 90

The staff reduction is part of the latest effort by the Chief Executive Officer, Darren Woods, to curtail spending and halt the worst string of quarterly losses since Exxon assumed its modern form with the 1999 takeover of Mobil Corp.

READ: Chevron considers divesting from Nigeria, to focus on U.S Shale Oil

What you should know

Exxon and other oil producers have been slashing costs due to a collapse in oil demand and prices, as well as ill-timed bets on new projects. The Big Oil rivals of Exxon are also cutting thousands of jobs in response to the pandemic-induced demand slump. BP Plc plans to slash 10,000 jobs, Royal Dutch Shell Plc will cut as many as 9,000 roles, and Chevron Corp. has announced around 6,000 reductions.

Coronation ads

Norton said that Exxon’s workforce stood at about 88,000 people, including 75,000 in-house employees and about 13,000 contractors as of year-end 2019.

READ: Why the NNPC is being dragged to US courts by Exxon Mobil, Shell

Exxon’s job cut is a sign of its weakened financial position compared to its former status as the S&P 500 Index’s biggest company less than a decade ago, and a profit powerhouse used to ride out oil-price cycles.

This year’s downturn has been particularly damaging because it also affected refining, usually a cushion in times of low oil prices. Also, it came at a time when Exxon was already increasing borrowing to fund a large expansion program. The company was forced to retreat on these plans in April, reducing capital spending by $10 billion and delaying or scaling back most of the major projects.

READ: Exxon begins talks with domestic firms to divest businesses in Nigeria

Jaiz bank ads

The stock has plunged more than 50% this year. Its dividend yield is now more than 10%, indicating that investors are anticipating a cut. Exxon maintained the quarterly payout on Wednesday and is expected to post its third consecutive quarterly loss when it reports earnings tomorrow.

Stanbic IBTC

What they are saying

The Company in its statement said, “These actions will improve the company’s long-term cost competitiveness and ensure the company manages through the current unprecedented market conditions.’’

Exxon’s spokesman, Casey Norton, through an email said that the total reduction means the company will reduce its workforce by about 14,000 people, split between employees and contractors from year-end 2019 levels. The cuts will come through attrition, targeted redundancy programs in 2021, and scaled-back hiring in some countries.

READ: Google fired up, post strong advertising growth

What this means

Another set of job losses in the oil sector in Nigeria is looming. Nigeria is one of Exxon’s biggest operational bases in oil and gas exploration and production globally. Also, this is another setback after Shell announced 9,000 job cuts globally, which includes Nigeria, and the announcement by Chevron that it plans to reduce its staff strength in Nigeria by 25%.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

Click to comment

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Energy

Buhari moves against DISCOs that collect money for prepaid meters

President Buhari has warned that tough measures will be taken against DisCos or their agents selling prepaid meters to their customers.

Published

on

Buhari moves against Discos and agents that collect money for prepaid meters

President Muhammadu Buhari said he will enforce tough measures against any electricity distribution company (Discos) or their agents selling prepaid meters to their consumers, against the directive that they should be distributed free.

According to a report from Punch, this disclosure was made by the Special Adviser to the President on Infrastructure, Ahmed Rufai Zakar, who represented President Buhari at the FGN/NLC-TUC ad-hoc committee on electricity tariff stakeholders engagement in Ibadan, Oyo State on Wednesday, December 2, 2020.

He said the President understands the plight of Nigerians on issues surrounding electricity and is determined to deal with bad elements.

(READ MORE: Power: Distribution of meters resumes in Lagos, Abuja, Kaduna and others)

What they are saying

He said, “We have made it very clear through the regulator’s direct order, as well as intervention from the Ministry of Power that the meters are to be provided to Nigerians at no cost. Even for meters that were paid for, there is the directive from the regulator to the discos that they would need to find a way to reimburse those citizens over time.

GTBank 728 x 90

“In cases where we find any disco or disco representatives selling the meters or exploiting Nigerians to be able to get meters by paying, we would take the full measures of the law. The President has mandated that these meters must be free. We have also said that they must come from local manufacturers. This would create jobs and revive our industry.

What you should know

  • The President had earlier directed that 6 million prepaid meters manufactured or assembled locally should be made available to electricity consumers to stop their opposition against estimated billing and even increase in electricity tariff.
  • While stating that he remains committed to the protection of poor and vulnerable Nigerians from increased electricity tariffs and arbitrary estimated billings, the President said he is working to ensure that Discos commit to increasing the number of hours of electricity supply everyday and improve on the quality of service.

Continue Reading

Energy

TCN restores collapsed electricity grid

TCN has now restored the electricity grid system which collapsed across the country over the past weekend.

Published

on

TCN MD Abdulaziz, four other directors receive appointment letters

The Transmission Company of Nigeria (TCN) has restored the collapsed electricity grid system across the country.

This was disclosed by the Acting Managing Director of TCN, Mr Sule Abdulaziz, during a media briefing on Wednesday.

According to the TCN boss, the system which collapsed on Sunday evening was restored within 40 minutes of the incident.

He said, “The company immediately went into action and stabilised the system in Abuja, before other parts of the country. There is nothing strange but it is normal for a system to collapse and that can happen in any country of the world.

“Since I came on board, we never had any system collapse and this one that happened on Sunday was restored immediately which is the fastest system collapse recovery. We are guarding the grid, we don’t want the system collapse to happen, but when it happens, the most important thing is what was done and how it was done to restore the system.”

GTBank 728 x 90

What you need to know

Three days ago, Nairametrics reported that the recent power blackout in the country was due to multiple trippings.

General Manager, Public Affairs, TCN, Ndidi Mbah, who made the announcement through a statement said the company had started the process of restoration to the national grid.

Mbah pointed out that the places that power is yet to be restored were Calabar, Makurdi, Jos, Gombe, Yola, Ugwuaji and Maiduguri axis.

Coronation ads

She stated, “The Transmission Company of Nigeria (TCN) regrets to inform electricity consumers nationwide that at 11:25 am today, the nation’s electricity grid experienced multiple trippings, which led to the collapse of the system.’

“TCN has since commenced grid restoration; power has been successfully restored to every part of the country, except Calabar, Ugwuaji, Markurdi, Jos, Gombe, Yola, and Maiduguri axes. The effort is however ongoing to ensure full restoration nationwide.”

Continue Reading

Energy

N250bn to be spent to fund compressed Natural Gas infrastructure

The CBN is to make available the sum of N250 billion to fund Compressed Natural Gas infrastructure.

Published

on

The Central Bank of Nigeria (CBN) is poised to make available the sum of N250 billion to fund Compressed Natural Gas infrastructure.

This move is in a bid to expand gas use and cut reliance on imported fuel, as the government looks forward to offering free conversion to enable some cars run on gas.

It is expected that by 2021, about 1 million cars would have been converted from PMS to Autogas for free.

The National Gas Expansion Programme (NGEP) launched by President Muhammadu Buhari, is part of the country’s effort to free itself of costly gasoline subsidies and conserve the hard-earned foreign reserves from petroleum product imports, making it imperative to focus on gas as an alternative fuel.

(READ MORE: Nigeria to import petroleum products from Niger Republic, sign MoU on transportation, storage)

GTBank 728 x 90

What they are saying

According to the Group Managing Director (GMD) of Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari,

“Select NNPC stations across the country will offer free conversion of ‘some cars’ to enable them to run on liquefied petroleum gas (LPG) or compressed natural gas (CNG). There are currently 80 locations in the country capable of fuelling the vehicles.”

Coronation ads

Bottom line

This is a welcome development as it is cleaner, safer, and affordable to run the cars on gas.

It would also, to a large extent, conserve the foreign reserves being depleted from huge petroleum product imports, as well as offer millions of job opportunities.

Continue Reading