Chevron Corporation last weekend tightened up the sack of 8, 500 staff in its Nigeria and global operations, and posted its first annual loss since at least 1980.
The company sacked 7,000 in 2016. That is after cuts of billions of dollars in asset sales and the accumulation of staggering debt to endure the industry collapse.
The company, said on its website that Nigeria was “an important part of Chevron’s business globally.” It revealed these in its post year-end results, published last weekend, noting that 2017 would also witness 15 per cent investments’ cut.
The United States (US) oil major, whose contracts’ termination led to the fresh sack of about 250 oil workers in Nigeria this month, is the first to publish its post year-end results and its results signalled the difficulties faced by the world’s biggest oil companies, as they struggle to emerge from the worst collapse in a generation.
Chevron, in the process that began in 2015, rounded up the number of sacked workers to 8,500 by December, 2016, according the last quarter report published by the New York Times.
The San-Ramon, California- based company, the report showed, laid off 7,000 staff before the end of 2016 in addition to the 1,500 it announced early in 2015.
The company had a $497 million loss last year and failed to replace all of the crude and natural gas it pumped with new reserves, it said in a statement.
The South West chairman of National Union of Petroleum and Natural Gas (NUPENG) workers, Tokunbo Korodo, told New Telegraph that the company allegedly continues what he called the “antilabour activities, which has led to the sack of 250 workers.”
While Chevron is cutting its budget for 2017 by 15 per cent, shale drillers Continental Resources Inc. and Diamondback Energy Inc. are lifting spending by 77 per cent and 106 per cent, respectively. Its shares also slumped the most in five months.
“As the first so-called supermajor oil company to post year-end results, Chevron’s results may herald bleak news for an industry battered by the oil-market crash that began in mid 2014,” a report by Bloomberg said.
“After hundreds of thousands of job cuts, billions of dollars in asset sales and the accumulation of staggering debt loads to endure the collapse, investors have been optimistic that oil producers who survived the darkest days are on the cusp of a new era of growth,” the report added.
After the 2016 loss, Chevron probably will be able to cover all of its costs this year with cash flow and generate excess cash as soon as 2018, said Brian Youngberg, an analyst at Edward Jones and Co. in St. Louis.
Major oil and gas projects that required huge cash infusions during the past several years are mostly complete and poised to begin contributing profits, he said.
Fourth-quarter net income of $415 million, or 22 cents a share, was lower than all 20 estimates from analysts in a Bloomberg survey. During the final three months of 2016, the company’s refineries earned $357 million, less than half the $762 million expected by analysts at Barclays Plc.