Oil report

UPDATE 1-Motiva plans layoffs, reorganization because of economic impact of COVID-19 –sources

(Adds details, background)

HOUSTON, June 12 (Reuters) - Motiva Enterprises plans to cut about 200 salaried and professional contract employees by September and reorganize some operations because of the economic impact of the coronavirus pandemic, sources familiar with the company’s plans said on Friday

The company said in statement responding to questions from Reuters that it was seeking efficiencies to deal with “the volatile landscape of the energy industry.”

“Motiva can confirm it will combine the Port Arthur Refinery and Port Arthur Chemicals into one Port Arthur Complex,” the company also said.

Employees at the refinery, chemical plant, terminal and Houston headquarters will be among the 200 losing their jobs by autumn, the sources said.

Organizations focused on project planning and engineering will be among those to be reorganized in addition to the refinery and chemical plant.

The layoffs represent about 10% of the workforce, according to the sources. Hourly employees at the refinery, which is the nation’s largest, and the chemical plant represented by the United Steelworkers union will not be included in the job cuts.

Motiva is a U.S. refining and fuels marketing subsidiary of Saudi Aramco.

In a message sent to employees on Thursday seen by Reuters, Motiva Chief Executive Brian Coffman said the company had started the year with expectations that a switch in marine fuel and gasoline standards would drive up margins for motor fuel.

“Based on these market expectations, the financials in our 2020 business plan were predicated on very attractive product margins for the year; however, these high cracks did not materialize and instead 2020 began with an unprecedented economic downturn and quickly grew to encompass both health and social crises as well,” Coffman wrote. (Reporting by Erwin Seba; Editing by Leslie Adler and Kim Coghill)