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Employees across Woodside lost their jobs today, with many more expected to follow, as chief executive Meg O'Neill chases a 30 per cent cut in operating costs.
Woodside today began what is expected to be a week of redundancies, and employees anticipate another round after the completion of an organisational review.
Boiling Cold understands from numerous sources that many areas of the LNG player lost employees today, including the logistics, exploration, geoscience, reservoir management and new markets teams.
The New Markets team is responsible for creating new business opportunities and has worked on trucking LNG to the Pilbara and hydrogen.
There was no official communication from Woodside management to its workforce about the redundancies.
Screenshot of a June Woodside advertising video: "Part of a better future."
Woodside made about 300 permanent employees redundant in October 2020 after ending several hundred contract positions in March 2020 when the COVID pandemic caused oil and gas prices to plummet.
In May, Woodside interim chief executive O'Neill told investors Woodside needed a "laser-like focus on cost management" to remain competitive and said she would target a 30 per cent reduction in operating costs.
Some employees expect another round of redundancies in late 2021 or early 2022 when a review of Woodside's organisation is completed.
Employees contacted by Boiling Cold expect the job losses to number at least several hundred.
Woodside is cutting its workforce as it faces numerous challenges over the next six months.
The company has targeted a final investment decision on the $US11.4 billion Scarborough project this year to offset declining production from the North West Shelf and a fall in Pluto output later this decade.
However, it first has to sell down its 100 per cent equity in a second LNG train at Pluto and, ideally, some of its 63.5 per cent interest in the Scarborough gas field.
There are several warning flags for potential buyers of equity in Scarborough or Pluto.
A softer market will depress prices and give buyers less incentive to sign long-term contracts traditionally used to reduce the risk of investing in new LNG production.
The cost of building a second LNG train at the Pluto LNG plant to process the gas from Scarborough is under pressure from one of the tightest labour markets the WA resources sector has seen as a mining boom hits a COVID-driven immigration clampdown.
There is also uncertainty about the approvals for the Pluto expansion, with a Supreme Court challenge by the Conservation Council of WA unlikely to be determined this year.
The company is navigating these problems without a permanent chief executive after Peter Coleman ended his decade-long tenure unexpectedly early in April.
Woodside did not respond to questions from Boiling Cold.
I worked in oil & gas in commercial and engineering roles for 20 years. Since 2016, I have written for The West Australian, WAtoday and Boiling Cold, winning five WA Media Awards.
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