Australia has been named as one of the key areas that will bear the brunt of 6000-7000 job losses from Chevron, as its two large liquefied natural gas projects move into the late phases of construction.
Chevron blamed the pressure on the late-2016 start-up target for the second $US29 billion Wheatstone LNG project in Western Australia, confirming the first cargo from its $US54 billion Gorgon venture will be delayed until the first quarter of 2016.
Chief executive John Watson said, “We’re still targeting the first LNG cargo by year-end 2016. However, we continue to work to mitigate Wheatstone schedule pressures from previous delays to module delivery.”
Watson said Chevron had been looking to adopt practices effectively used at other LNG projects in Australia to get Wheatstone back on track to start for the fourth quarter of 2016.
The layoffs equate to about 10 per cent of its workforce, and come after the company already announced in July cuts of 1500 jobs.
Chevron also said it would pursue further asset sales, expecting to raise $US5-10 billion through 2017 after bringing in $US11 billion from sales over the past two years.
The company is slicing capital expenditures next year by 25 per cent to $US28 billion at most.
Although the market was suffering from oversupply, Watson said he still expected rapid growth in gas demand with more opportunities to pick up new supply contracts, particularly for deliveries in the next decade.
Oil and gas production is expected to increase by 13-15 per cent to the end of 2017, down from a previous forecast of 20 per cent.