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25 CI oil jobs to go Chevron cuts back staffing after production decline & Pacific Energy Resources bankruptcy Alan Bailey Petroleum News
Chevron announced Nov. 4 that it is going to lay off an estimated 25 operations and maintenance staff from its Cook Inlet operations “due to decreased operational activity and difficult economic conditions associated with its Cook Inlet oil assets.”
“The employees will be notified of their status on Nov. 16,” company spokeswoman Roxanne Sinz told Petroleum News.
Chevron also anticipates transferring some of its Anchorage-based staff to other positions within the company, Sinz said.
Over the past the three years Chevron had grown its operation and maintenance workforce to support its Cook Inlet oil operations, but a series of factors external to the company are now forcing some cutbacks, she said.
Production decline A primary reason for the cutbacks is an accelerated production decline in the company’s offshore Cook Inlet oil fields, following the April to August shut-in of the fields as a consequence of problems at the Drift River oil terminal during the eruption of nearby Redoubt Volcano.
Following the early April field shut-in people speculated about the potential impact on the aging fields of ceasing production for an extended period of time. Water encroachment into the oil reservoirs was a likely result. And Dudley Platt, a petroleum engineering consultant with many years of Cook Inlet experience, told Petroleum News that the Hemlock formation, the main oil-bearing reservoir rock for the oil fields on the west side of Cook Inlet, tends to contain clay which is susceptible to swelling, a phenomenon that might tend to clog the reservoir when fluid stops flowing into the producing wells.
Recent production figures from Chevron’s offshore oil fields in Cook Inlet appear to justify those concerns about production impacts.
In September, the first full month of production following field restart, total oil production from the fields averaged 5,371 barrels per day, while October production came in at 5,758 barrels per day, Sinz said. Those figures compare with production of about 7,500 barrels per day prior to the shut-in, she said. So, the production rate drop appears to be about 25 percent.
By comparison, in 1968 production from Granite Point, just one of the impacted fields, peaked at an average rate of 35,975 barrels per day, while in 1971 Trading Bay, another of the fields, peaked at 18,395 bpd.
Pacific Energy The bankruptcy of Pacific Energy Resources has also impacted Chevron finances in its Cook Inlet operations, Sinz said. As well as being a 50 percent partner in the Drift River Terminal and in the Cook Inlet pipeline that carries oil to the terminal, Pacific Energy had a minority interest in the Chevron-operated Trading Bay field.
And high operating costs in the Cook Inlet have also factored into the decision to make staffing cuts, Sinz said.
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