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Qatar Petroleum plans job and cost cuts amid market downturn

May 22/2020

MOSCOW (MRC) -- Qatar Petroleum, one of the worlds biggest energy companies, plans a new wave of job cuts and spending reductions to cope with the slump in oil and gas demand which has hit global economies, reported Reuters with reference to two sources familiar with the matter.

Economic lockdowns brought on by the coronavirus pandemic look set to cut global energy demand sharply with business activity stalling across much of the globe as the containment measures hammer the world economy, cementing economists views of a deep global recession.

Qatar Petroleums (QP) Chief Executive Saad al-Kaabi told the companys employees in an internal memo of the planned staff cuts which would be finalised after Eid-al-Fitr religious holiday for Muslims, which is towards the end of May, the sources said.

"Like all oil and gas companies QP is looking at reducing expenditure due to the market downturn which... will be weak for some time," one of the sources said, adding that QPs planned cuts would not impact its energy development plans.

Qatar, a tiny but wealthy country is one of the most influential LNG market players with annual production of 77 million tonnes. It plans to increase its LNG production to 126 million tonnes a year by 2027.

QP will postpone the start of production from its new gas facilities until 2025 following a delay in the bidding process, but is not downsizing the worlds largest LNG project, the North Field expansion, Kaabi told Reuters earlier in April.

The planned job and cost cuts will be the third wave of restructuring by QP over the past 6 years. In 2015, the company said it has reduced its staff numbers in a restructuring and decided to exit all non-core businesses after a plunge in oil and gas prices increased financial pressures on Qatar.

In 2018, it has also merged state-owned LNG producers Qatargas and RasGas into one company.

Kaabi told Reuters in 2018 that QPs operating costs would be 4 billion Qatar riyals ($1.1 billion) a year lower due to its earlier restructuring, which included cutting as many as 8,000 jobs to create a more streamlined operation.

As MRC informed earlier, Qatar Petroleum said Monday it joined with France's Total to acquire a 45% participating interest in exploration blocks offshore of Cote d'Ivoire. The blocks CI-705 and CI-706 are located in the Ivorian-Tano basin, covering an area of about 3,200 sq. kilometers, Qatar said in a statement. The farm-in agreement marks QP's first foray into Cote d'Ivoire. Terms were not disclosed.

We remind that Total has recently disclosed that it is evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.


mrcplast.com
Author:Margaret Volkova
Tags:PP, PE, LLDPE, crude and gaz condensate, PP block copolymer, homopolymer PP, propylene, LDPE, HDPE, ethylene, petrochemistry, Qatar Petrochemical, Total Petrochemicals, QP, Qatar, Cote D'ivoire, Rossiya, South Korea.
Category:General News
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