Paul Garvey
Resources Reporter
Perth https://plus.google.com/109921586420225671648
Woodside chief executive Peter Coleman earlier this year spelt out plans to deliver productivity improvements and cost savings. Source: News Corp Australia < Prev Next > •• WOODSIDE Petroleum is looking to cut up to 800 jobs, or more than 20 per cent of its workforce, as part of a sweeping review of its business.
Industry sources in Perth have told The Weekend Australian that Woodside has set an internal target of delivering the deep cuts progressively over the remainder of this year.
The company’s next wave of growth projects has failed to materialise in recent years, leaving excess capacity within portions of the business. Woodside chief executive Peter Coleman earlier this year spelt out plans to deliver productivity improvements and cost savings, but the company has not announced any formal cuts to employee numbers.
Woodside employs just under 4000 people, predominantly based in Western Australia.
The purported job cuts come at a sensitive time for Western Australia’s labour market, with the mining sector shedding jobs amid cooling commodity prices and a slowdown in capital expenditure.
The planned job cuts come as Woodside continues to search for a new growth project to add to its portfolio. Its plans to develop its huge but remote Browse Basin gas reserves through an LNG plant at James Price Point in northern Western Australia were scrapped last year. Work on an alternative plan to develop those reserves through a floating LNG plant is predominantly being carried out by its partner Royal Dutch Shell, which owns the floating LNG technology.
Woodside recently walked away from its proposed purchase of a stake in the Leviathan gas project off Israel. Woodside had originally planned to be involved in the study and development of LNG facilities at the project.
Its undeveloped Greater Sunrise gas project in the Timor Sea remains mired in disagreements between East Timorese and Australian authorities, and Woodside has so far been unable to find enough gas to support a planned expansion of its Pluto LNG plant.
Much of the job cuts are likely to come from divisions that had been earmarked to work on those projects. It is understood Woodside’s exploration division will be quarantined from the cuts, given the importance of the arm’s capacity to generate new growth projects.
Woodside has significantly broadened its exploration footprint in the past year, picking up new acreage in countries including Myanmar, Ireland and New Zealand. The job losses are likely to come incrementally over the rest of the year, and it is unclear how many of the jobs have already been cut. According to Bloomberg data, the number of full-time employees at Woodside fell by about 100 people last year to 3896.
A spokesman for Woodside declined to comment on the figure of 800 jobs, but confirmed the company was deep into a broad review of its business. “Woodside has a productivity program that is delivering process improvements and streamlining how we work,” the spokesman said.
At Woodside’s investor briefing last month, Mr Coleman said Woodside was targeting $800 million in savings by the end of 2016 by increasing production, cutting its external spending by 10-20 per cent, and by delivering 10-20 per cent “improved organisational efficiencies”.
While employee numbers were falling, the spokesman said the company was still making some new appointments.
“Woodside continues to develop and promote people from within and continues to recruit for critical roles, graduates, vacation students, trainees and apprentices,” the spokesman said.
Shares in Woodside closed up 1.9 per cent at $42.70.
WPL Price at posting:
$42.79 Sentiment: Hold Disclosure: Held
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