Oil Search to cut over 500 jobs

OIL Search will reduce its total workforce by 564 by the end of the year, according to the petroleum company.
Oil Search full-time employees (FTEs), which include employees and long-term contractors, have been reduced from 1,649 people as of March 14 to 1,222 currently, with a further 137 people transitioning out by year end.
This would represent a fall in the total workforce of approximately 34 per cent.
The company, in a market release yesterday, noted that the reductions had been made across all locations.
The company noted that it had recently completed a detailed and systematic review of its organisation and cost structure.
This was aimed at ensuring that the company not only has the resilience, capabilities and financial strength to withstand a prolonged period of subdued oil prices, but is also optimally positioned to operate its production assets safely and cost efficiently and progress its world class growth opportunities in PNG and Alaska when market conditions allow.
As a result, structural changes have been implemented to make the business leaner, provide for streamlined decision-making and establish a more integrated structure that clarified accountabilities and drives performance.
The revised organisation and cost structure deliver sustainable and material reductions in operating and corporate overhead costs without compromising health and safety of the staff, contractors and communities, which remain Oil Search’s highest priority.
Managing director Dr Keiran Wulff said: “The painful decisions we have taken to optimise our organisational structure, enhance efficiencies and reduce operating costs have not been made lightly.
“They are the result of extensive studies aimed at ensuring we have an organisational structure that not only makes us more resilient to oil and gas price fluctuations but also embeds a culture of continuous improvement, operational excellence and strict fiscal discipline.
“We have reviewed how to make our company stronger by prioritising activities and focusing on the capabilities that are required for us to be successful under a range of economic conditions.
“The work undertaken has been assessed against an independent domestic and international industry organisational benchmarking study to ensure Oil Search’s new cost structures are competitive with global energy industry peers.
“Under the new structure, there is a material increase in executive and senior leadership opportunities for PNG nationals, which is in line with the evolving dynamics in PNG and increasing importance of citizen representation.
“Expatriate positions in PNG will be reduced from 10 per cent to 7 per cent of the workforce.
“In addition, gender diversity has increased, with women now representing more than 28 per cent of the workforce, from 25 per cent previously.
“We are confident that, following these and other initiatives underway in 2020, including the decisive cuts in investment spending announced in March and the US$700 million (K2.3 billion) capital raising in April, Oil Search is positioned to deliver long term shareholder value.”