Chevron Thailand to cut 800 jobs under $500 million cost-savings plan

BANGKOK (Reuters) - U.S. oil firm Chevron plans to lay off 800 staff this year in Thailand as it looks to cut $500 million in costs at the Thai business to weather the fall in global oil prices, the company said on Monday.

The logo of Dow Jones Industrial Average stock market index listed company Chevron (CVX) is seen in Los Angeles, California, United States, April 12, 2016. REUTERS/Lucy Nicholson

Chevron has slashed costs worldwide but the cuts were not deep enough to prevent the firm reporting its biggest quarterly loss in 15 years.

Chevron is Thailand’s largest oil and gas producer, supplying about half of the Southeast Asian country’s natural gas demand. Thailand relies on gas to fuel around 60 percent of its power generation capacity.

Output would not be impacted by the cuts, Chevron Thailand Exploration and Production President Pairoj Kaweeyanun told reporters on Monday after meeting with Thai energy ministry officials.

“The cuts will help the company to continue operations in Thailand,” he said. Chevron aimed to make savings of $500 million in Thailand this year, he added.

The cuts would take effect on Aug. 1, the company said in a separate statement. Chevron Thailand employs about 2,200 staff and another 1,700 contractors, the statement said.

The staff cuts are in addition to the laying off earlier this year of around 100 staff, mostly expatriates, Pairoj said.

Chevron operates several oil and gas license blocks in the Gulf of Thailand and is in discussion with the Thai government on extending concessions for some of them beyond the expiry dates of 2022-2023.

Chevron has submitted proposals to the energy ministry on the concessions and hoped for a government decision in early 2017 to ensure it could make investments needed to maintain production, Pairoj said.

Chevron is also the majority shareholder in Star Petroleum Refining Pcl (SPRC), which raised $365 million in a share listing offer in late November. SPRC operates a 165,000 barrels-per-day refinery in eastern Rayong province.

Writing by Simon Webb; Editing by Christian Schmollinger, Greg Mahlich