Aramco CEO Assures Employees of Company’s Strength

Saudi Aramco is well prepared to face the steep drop in oil prices in the short and medium term, and it has made some adjustments in light of the price fall, according to CEO Khalid A. Al-Falih.
Al-Falih said in a memo published in the company’s internal Arabic weekly magazineQafilah that he understands that the current market situation has created ambiguity among company employees and their families about the company's ability to cope with sharply lower oil prices. “That’s why I am here confirming to you that we have strengthened our position when oil prices were high, as we expected this scenario to happen,” Al-Falih said in the memo. “We are able to maintain our long-term commitments, and we will continue our work with high flexibility, efficiency, and wisdom.”

Despite the recent drop in oil prices, Saudi Aramco CEO Khalid A. Al-Falih said the company will "maintain [its] long-term commitments."

The current situation offers an opportunity for Saudi Aramco, he said. “For example, amid these circumstances, we will be able to execute our projects at lower prices because others will be obliged to postpone their projects. This will lead service providers to slash their prices in order to get work,” he said.
Al-Falih said he expects many oil and gas companies will lay off employees, which may offer an opportunity for Saudi Aramco. “We will be able to hire talented people and experts we need to keep our investments going on,” he said.
Meanwhile, Al-Falih said that his company made eight discoveries in 2014, which will help boost the company’s overall reserves. “In addition, our gas production capacity has hit historic levels at 8 billion cubic feet per day,” he said.
By: Abdelghani Henni is the Middle East Editor for the Journal of Petroleum Technology

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Schlumberger to cut 9,000 employees, including in Houston

HOUSTON – Oil field giant Schlumberger said Thursday it will cut approximately 9,000 employees – around 7.5 percent of its workforce around the globe – as both petroleum prices and oil-company spending nosedive.

Schlumberger’s profits fell 82 percent in the fourth quarter as it wrote down $1.7 billion in assets. It said it recorded a $296 million charge related to its headcount reduction.

Robert Drummond, President of Schlumberger North America (left) and Jeremy Aumaugher, South Division Operations Manager (Tom Reel/ San Antonio Express-News)

“It’s very unfortunate, but this is definitely not going to be the last headcount reduction in 2015 in the energy space,” said Rob Desai, an analyst with Edward Jones. “The goal is to position the company to come out of this downturn stronger.”

The oil-tool maker banked $302 million, or 23 cents a share, in net income in the October-December period, compared to $1.66 billion, or $1.26 a share, in the same period in 2013. Its revenues were up from $11.9 billion to $12.6 billion.

The job reductions began in the fourth quarter and are expected to be completed later this year, Schlumberger spokesman Stephen Harris said in an email.

“These global reductions encompass many geographic regions in which we operate, including the Houston area,” Harris said. The company is “not releasing any details on exactly how many and where these reductions are coming from, however.”
The company took an $800 million impairment charge when it retired some of the seismic vessels from its fleet. Schlumberger also took a $472 million devaluation charge on the devaluation of Venezuela’s currency against the U.S. dollar. And it saw $199 million impairment charge as the value of an investment in the Eagle Ford Shale sunk.
Traders reversed a large portion of Wednesday’s rally in crude oil. Futures for international Brent crude fell $1.02 to $47.67 per barrel on London’s ICE Futures Europe market. U.S. benchmark West Texas Intermediate fell $2.23 to $46.25 a barrel on the New York Mercantile Exchange.

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