MOSCOW (MRC) -- State oil giant Saudi Aramco started laying off hundreds of employees this month, two sources familiar with the matter said, as global energy companies reduce their workforces in response to the coronavirus crisis, reported Reuters.
Like other top oil firms, Aramco has cut capital spending for 2020 after the pandemic brought an unprecedented drop in oil demand and hammered crude prices. Oil majors have cut workforces by 10% to 15% to cuts costs and as part of restructuring plans.
Most of those who lost jobs at Aramco were foreigners, the sources said. One source estimated that 500 people had been laid off, adding that the job losses were mostly based on performance and similar actions took place each year.
Aramco has more than 70,000 employees.
"Aramco is adapting to the highly complex and rapidly changing business environment caused by the COVID-19 pandemic. We constantly review and revisit our operating expenditures where necessary to continue driving operational excellence and profitability,” Aramco said in a statement.
“We are not providing information regarding the details of any action at this time, but all our actions are designed to provide us more agility, resilience and competitiveness, with a focus on long-term growth,” it said.
Qatar Petroleum, one of the world’s biggest energy companies, has also laid off foreigners and cut its spending plans to cope with the slump in oil and gas demand which has hit global economies, industry sources have told Reuters.
Kuwait, a key Gulf oil producer, plans to stop hiring foreigners for its oil sector for a year, the Kuwaiti oil minister said this month.
As MRC wrote previously, Saudi Aramco on June 17 said it completed the share acquisition of a 70% stake in petrochemicals company Saudi Basic Industries Corporation, or SABIC, from the Public Investment Fund, the sovereign wealth fund of Saudi Arabia, for a total purchase price of Riyal 259.125 billion (USD69.1 billion). However, the transaction terms have been changed to increase the timeline over which Aramco makes the payments by almost three years. An upfront cash payment of 36% of the deal value has also been eliminated from the deal.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco"s value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.