Tullow Oil is planning to reduce its staff head count in Kenya, Uganda and Ghana as the company plans to cut down expenses by $20 million in 2020 as the Irish explorer restructures following lower input in Ghana, unsuccessful results in Guyana and delays in the East Africa region development phase. According to a source in Tullow Oil this move would reduce administration costs from $100 million to $80 million in a move likely to affect around 650 employees with consultation processes having said to have commenced.
According to the source Tullow estimates that the measures will deliver considerable savings and the group’s workforce may reduce by approximately a third globally with potential office closures in Dublin and Cape Town among a number of measures to reduce costs and overheads,” the spokesman quoted by Reuters confirmed. The report also suggests that the company will be cancelling its $100 million dividend plans.
In Kenya a source confirmed that consultations are expected to begin this week with the staff cuts expected to affect about 45% of the current workforce or slightly more. With details still trickling it is expected that the staff cuts will affect all departments from the head office to the fields casting a dark blanket on the company’s future in Kenya.
Below is a leaked letter believed to be from Tullow Oil Kenya circulating in various social media accounts.
In Uganda the staff cuts are expected to be less corrosive as the company had already cut its headcount due to the delay in the farm-out process to total.
Already to reports emanating from France last week Tullow Oil the operator of blocks Blocks 10 BA, 10 BB and 13T in the South Lokichar Basin the company together with its JV partner Total seeking for a partial or total equity change in their acreage sending mixed messages in the Kenyan nascent oil and gas industry.
Already Tullow’s free cash flow has dipped by $150 million at an oil price of $60 a barrel with hard times projected for oil prices globally especially with the outbreak of the corona virus in China that has led to a drop in global crude oil demand.
The operator in both Kenya and Uganda has further pushed its full year results to March 12th as to when the staff cuts information is expected to emerge more clearly with a new CEO expected to be announced.