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Unocal closes Kenai office, eliminates 71 positions in Alaska operations Job losses in Kenai, Anchorage; 12 Unocal employees transferred, 47 laid off, 12 contract positions eliminated; company will run only a workover rig through 2003 Kristen Nelson PNA Editor-in-Chief
Unocal Alaska, Cook Inlet’s dominant oil and gas producer, is scaling back, a move the company says reflects the fact that its business in Cook Inlet is mature, which means declining resources and few opportunities for finding additional reserves.
The company said Nov. 12 that it “is implementing a comprehensive restructuring program to improve Cook Inlet business profitability.” That restructuring includes reduction in capital investments, elimination of duplicate services, shutting in certain facilities and streamlining operational, technical and support functions.
Unocal said that as a result of the restructuring, the company’s Kenai office will be closed and 71 positions are being eliminated at field locations and in the company’s Anchorage and Kenai offices. Forty-seven employees have been laid off, 12 employees have been transferred to other Unocal business units and 12 contract positions have been eliminated. Some Kenai office jobs will be eliminated, while the work site for some Kenai office jobs will be moved to the Anchorage office or other locations on the Kenai Peninsula.
The company said the 71 positions represent approximately 18 percent of Unocal Alaska’s total workforce.
Changes needed in Cook Inlet The restructuring came as a result of an analysis of Unocal’s Alaska business unit, as the company tried to improve profitability and viability in a mature business, Unocal said.
“As we studied the costs, operations and exploration opportunities, it became clear that to have a viable business in the Cook Inlet, we had to make significant changes now or face even more serious challenges in the future,” Unocal Alaska Vice President Chuck Pierce said in a statement.
Unocal Alaska spokeswoman Roxanne Sinz told PNA that prior to restructuring there were 450-plus company employees. No functions were moved out of state, Sinz said. Some redundancy was eliminated between the Kenai and Anchorage offices in environmental, accounting and human resources, she said. Twenty-three of the 59 Unocal positions eliminated were in the field, 11 were in the Kenai office and 13 were in the Anchorage office. The 12 employees who were transferred to other business units were from the Anchorage office.
The company also said it would shut in the Baker and Dillon platforms over the next few months, a decision released in October. Sinz had told PNA Oct. 29 that Unocal expected to shut in Dillon near the end of this year, and Baker by the end of the first quarter of next year. Recent budget at $80 million Unocal’s capital budget was some $80 million for 2002, about the same as 2001, Pierce told PNA in a January 2002 interview, up steeply from 2000’s $35 million capital budget.
He said then that the company planned to run two rigs offshore, at least for the first part of the year, and a third rig onshore.
Sinz told PNA that the reduction in capital investments will probably mean less Cook Inlet work, but that the company’s 2003 capital budget will not be finalized until sometime in December.
“We’re still in business in Cook Inlet, but those are maturing fields,” she said.
Unocal will have only a workover rig working in Cook Inlet, no drilling rigs, through 2003, Sinz said.
Unocal said it will continue to pursue selective, focused development and exploration projects to add incremental reserves and production and will retain its partner-operated working interests in the Kuparuk River and Endicott fields on the North Slope. Unocal also holds North Slope undeveloped acreage and said it will continue its exploration activities there.
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