Chevron to continue large budget cuts in PZ operations in 2016. Cuts will included further reductions of activity and personnel. There are on going activities at the management level to determine to minimum number of personnel required to fulfill business objectives and contractual agreements. Mid year 2016 is a trigger point for additional reductions and by 2017 if no resolution achieved, chevron will begin to enact its strategy to exit from these operations completely.
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This week Saudi has offered to provide funding for some Saudi employees working for Saudi Arabia Chevron. Saudi intends to minimize layoffs of national employees. Saudi funding to provide enough funding to keep Saudis employees through 2016. No funding offered to help minimize other operational losses or costs of non Saudi workforce supporting the BU.
By the way the beef is not with Saudis in this fiasco, it is the Kuwaitis who are not issuing work permits. They felt slighted when the Saudis extended Chevron's contract in 2009 without calling them to the table. It is complicated. This is all posturing but certainly Chevron deserves to be compensated for their part.
I'm sure the international court can settle this in just a few minutes over a cup of coffee. Good luck Pollyanna.
Expats will be gone Q1 2016 should there be no resolution (in time for the next ROM), but Chevron will continue to maintain a presence until the end of concession or until early termination through a settlement in international court/ arbitration.
Deep Throat
Is there a source for this wonderful bit of speculation? Our course by mid 2016 Chevron would have not choice but to completely exit PZ as there will be no one left with a valid work permit
Finally, it's their turn to squirm.
The axe will fall q1 2016 for PZ employees. At the highest levels HR and management are already redrawing org charts... Most team leads are unaware of the reorg that is pending.
The Saudis have totally screwed themselves. You can bet your ass chevron will take them to international court seeking compensation for revenue loss over the concession period, in addition to billions in bonuses paid upfront to Saudi at the time the concession was renewed. Saudi will also lose the benefit of chevron covering 50% of all operating costs and their technical expertise to develop these fields and the expat manpower that has carried these fields for the last several decades. This could be a blessing in disguise, yes there will be major reserves write offs, but a huge influx of cash as the result of any settlement. In the near term, best of luck to any chevron employees suffering through this ordeal.
Let the Saudis suck air. THEY are the primary reason for the mess the Middle East is in, right now.
The Saudis and Kuwaitis are so caught up in politics they have yet to realize the potential impact to their operations should Chevron decide to exit. Saudi couldn't have negotiated a better deal and without chevrons technical expertise they can forget about all future growth projects. All that said, yes an exit from the PZ would have a significant impact to chevron.
This is expected. With a ticking clock on the concession agreement, chevron can't wait forever. Saudi still expects us to foot 50% of the bill, but every year we wait, project economics degrade and we lose another years worth of oil production.
If you are currently in a non critical role you can expect to participate in the 2016 spring ROM. If you are Saudi, over the course of next year you can expect to see significant head count reductions. If you are are on a team supporting key objectives, you can expect up to 25-50% reduction over the course of next year.