Danish energy company Maersk Oil announces plans to make further cuts to its payroll as pressure from low oil prices mounts. Photo by project1photography/Shutterstock
COPENHAGEN, Denmark, May 10 (UPI) -- Danish energy company Maersk Oil announced it was trimming its payroll in an effort to cut costs in response to the pressure from lower oil prices.
Crude oil prices in April rallied nearly 25 percent, or roughly $10 per barrel, as investors took note of the expected return to balance in a market characterized by heavy supply-side pressures. Compared with last year, however, the price for Brent crude oil, the global benchmark, is down 30 percent. Oil prices at this point in 2014 were well above $100 per barrel.
Maersk Oil said it was cutting about 40 positions from its regional offices. Despite efforts to cut costs already, the company said lower oil prices continued to put pressure on its earnings.
"Today's changes are necessary to ensure our organization reflects the current market and aligns our costs to our activities," CEO Jakob Thomasen said in a statement. "We must continue to balance the realities of the tough market conditions with the growth agenda for Maersk Oil."
The company already said this year it would manage its U.S. assets in the Gulf of Mexico from Copenhagen as it shuts down its offices in Houston, laying off about 60 people. Early this year, the company suffered a blow when Norwegian energy company Statoil canceled a contract with the Danish company's drilling unit.
Elsewhere, Maersk Oil said it was trimming operations in Angola, leaving only a handful of employees behind to manage its Chissonga oil project in the West African country.
The company said Tuesday it's been able to cut expenses to the point that it was breaking even if oil is priced at around $43 per barrel, on par with the recent average.
"However, the business is continuing to look for ways to reduce exposure to investments that deliver high break-even costs," the company said in its statement.