Some 100 job cuts are being made at Maersk Oil as the company struggles with improving returns on its unsanctioned Chissonga project in Angola that will see the closing of its Houston office and reducing its staff in Luanda.
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Image from Maersk Oil Twitter/Stuart Henderson. |
Maersk is citing continuing and challenging market conditions in deepwater developments for the reductions in employees and contractors, of which 60 will be from Houston and 40 in Luanda. The number add to the 60 roles in Angola and the US, which were cut in September 2015 that were associated with delays in Chissonga.
Maersk Oil’s non-operated activities in the Gulf of Mexico, currently also run from Houston, will be transferred to its Copenhagen headquarters in the coming months, Maersk confirmed.
Deemed as Maersk Oil’s most important project in Angola, the Chissonga field is located in the western part of Block 16, some 130km offshore from the Soyo beach crossing, in 1200-1500m water depth..
Although the company said it has been extensively working to reduce its capex and improve returns on Chissonga, the decision to make the cuts were necessary. However, there are options, which include a future project developed jointly with other hydrocarbon discoveries in the same region.
”Chissonga, like many deepwater projects in our industry, remains economically challenged in the current market environment. Maersk Oil remains committed to the Chissonga project and we have evaluated multiple options to commercialize these resources in the best interests of our partners and the Angolan authorities. In addition to work to reduce overall project costs we are also looking at options for a possible joint development,” Gretchen Watkins, Maersk Oil COO said.
The most recent job cuts will leave about 18 employees in the Luanda office to continue working on Chissonga. Other responsibilities for the project will transfer to Maersk Oil’s Copenhagen headquarters.
“A further restructuring of the Chissonga project team is a necessary step on the path to securing a future development project for Maersk Oil in Angola. This difficult decision does not diminish our keenness to pursue the Chissonga project sanction in due course, provided we can achieve an attractive return on our investment,” Watkins continued.
In October, Maresk announced it would make 10-12% of workforce reductions across its business to drive operating costs down by 20% by the end of 2016.
“The impacts will see a reduction in the number of employee and contractor roles in a range of Maersk Oil business locations, as well as the company’s headquarters. It brings the total number of positions taken out of the organization during 2015 to approximately 1250,” the company said in October.
About Chissonga
In 2005 Maersk Oil bought a 50% share in Block 16 in Angola, and in 2009 it drilled its first prospect in the block, which turned out to be a discovery. Two years later Chissonga was declared commercial.
The first appraisal well at Chissonga was completed in April 2010 and further appraisal wells were drilled in late 2011, 2012 and 2013 to define a more accurate resource range in the stacked turbidite sand reservoirs. The Chissonga reservoir comprises four stratigraphic layers with hydrocarbon accumulations. Following appraisal, the optimal development concept is currently being matured.
Maersk Oil holds a 65% interest in the deepwater Block 16 with partners Odebrecht (15%) and state oil company Sonangol P&P (20%).
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