Operators adapting to market, revising their strategies
Amidst the stark realities of today’s market, operators are revising their exploration plans and field development strategies. And while layoffs are being announced and budgets being cut, some operators are reaffirming their commitment to the Gulf of Mexico, particularly its deepwater frontier regions.
For example, Chevron recently announced that it had placed all of its shallow-water GoM assets up for sale in an effort to focus on its deepwater business. That move is part of the company’s plans to restructure its Gulf of Mexico activities. Now, Chevron says it is accelerating those plans.
“Chevron is continuing to adapt to the evolving business environment by revising organizational structures, increasing efficiencies and reducing expenses,” Chevron spokesman Cam Van Ast told the Houston Business Journal. “In the Gulf of Mexico, this includes transitioning to a deepwater-focused business with fewer, more complex assets.” Chevron expects its shallow-water divestments to be completed by the end of 2017, Van Ast said.
Through the end of 2015, Chevron generated $11.5 billion in cash through divestments, and it is targeting another $5 billion to $10 billion over 2016 and 2017. According to the Houston Chronicle, the company reportedly is marketing 27 oil and gas fields in the Gulf, which could fetch more than $1 billion.
Meanwhile, Cobalt International Energy says it will eliminate 50 Houston jobs as the company readjusts after the sale of its offshore Angolan assets. The company is looking to reduce its total workforce by about 50%. Those 50 workers account for nearly one-third of Cobalt’s 155-person, Houston-based workforce.
“With the pending transfer of Cobalt’s Angolan assets and its focus on reducing costs, Cobalt is also in the process of restructuring its organization to better align with its post-Angola business needs,” the company announced on Feb. 22.
Last year, Cobalt said it would sell its interest in offshore Angola for $1.75 billion to state-owned Sonangol. Cobalt is exiting Angola entirely in order to strengthen its finances and focus its exploration and production primarily in the deepwater Gulf of Mexico.
“In light of the current market environment, Cobalt is taking action focused on increasing efficiency, reducing costs and focusing on work that directly supports business activities,” wrote Wanda Lewis, Cobalt’s vice president of human resources. Lewis’s letter to the Texas Workforce Commission was cited in a Houston Chronicle Fuel Fix report. According to the report, Cobalt counted 352 total workers at the end of 2015. The plan is to cut that number down to 140 workers at the end of the restructuring.
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