Abu Dhabi's Adnoc cuts 5,000 jobs

15 May 2016

State-owned hydrocarbons producer has carried out 2,000 redundancies since start of 2016

Abu Dhabi National Oil Company (Adnoc) plans to cut 5,000 jobs by the end of 2016, as the state-owned producer continues to restructure and cut costs amid lower oil prices.

The company has already terminated the services of 2,000 expatriate employees since the start of 2016, and has asked division managers to identify a further 3,000 job cuts by the end of this year, according to several industry sources. The planned job cuts would reduce Adnoc’s workforce by just over 9 per cent from a headcount of about 55,000 people at the start of 2016.

“In keeping with the entire oil and gas industry, Adnoc is constantly looking at ways to be more efficient and profitable, particularly in the current market environment,” said an Adnoc spokesperson. ”This is in line with our strategic goals of efficiency, profitability and performance.” The company did not comment on the number of planned redundancies.

Adnoc is responsible for the vast majority of oil and gas production in the UAE through various subsidiaries and joint ventures with international oil companies (IOCs). The firm controls Abu Dhabi’s oil reserves, which represent about 6 per cent of the global total.

Adnoc has undergone sweeping changes of its top management since the start of 2016, appointing director-general Sultan al-Jaber in February, to replace Abdullah al-Suwaidi who had led the firm since 2011.

MEED revealed on 12 May that Al-Jaber has replaced the CEOs of six of Adnoc’s main operating companies, including its largest respective oil, gas and petrochemicals producing interests. The company also appointed new heads of its gas and petrochemicals production divisions.

Adnoc has been under pressure to cut costs to offset the fall in global oil and gas prices. The company is aiming to increase crude production capacity to 3.5 million barrels a day (b/d) by 2018, from a current level of about 3 million b/d.

Both national oil companies and IOCs have carried out major job cuts since crude prices began to decline from the middle of 2014. The Brent crude price has recovered from a low of under $32 a barrel in January, closing at $47.83 a barrel on 13 May, but remains a long way below the $100-plus price oil producers enjoyed for the four years up to mid-2014.

UK-based BP, one of the largest IOCs, announced in February that it would slash 7,000 jobs after reporting a large annual loss for 2015. In December, UK/Dutch Shell pledged $5bn-worth of capital spending cuts as it looked for shareholder support for its takeover of energy rival BG Group.

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