Certainly, the fate of many in Uganda, for example, must have remained hanging in balance until last week when Tullow Oil decided to lay-off 120 of its workers here
In January and while commenting on the 2015 Trading Statement and Operational Update, Tullow Oil Chief Executive Officer Aidan Heavey said Tullow would continue to carry out a review of the business to streamline processes and improve efficiency, expected to result in significant long-term cost savings for the company. The Company identified $500m worth of cost saving over this year and that was definitely going to include a few job cuts here and there.
Obviously what forced Tullow to review its business was the the raging world oil prices which had caused the share prices of the company to plummet to levels that had not been anticipated. Later, by the company’s annual Financial Report, it emerged that Tullow had made the first loss in 15 years, had suspended the dividend and speculation was rife that it would even be pushed out of business.
So when later Tullow drops employees in Ghana and Uganda, there is little reason to be surprised. Tullow is only following its plan of cost cutting. And whereas the employees are crying, the shareholders must be smiling and hoping that this cost cutting will help their company keep its head above the water in these trying times in the Oil and Gas Industry. As to whether it will actually bear the desired fruits, only time will tell.
Meanwhile and for Uganda’s case, it is not just about the prices, the government’s delay to issue production licences has also rendered the oil companies redundant given that without the production licences there is little they can do at the moment.
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