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OMV Might Cut Jobs Due to COVID-19, Low Oil Prices

April 8, 2020

For Illustration; Offshore Oil Workers  - Image by Алексей Закиров - AdobeStock

For Illustration; Offshore Oil Workers - Image by Алексей Закиров - AdobeStock

Oil and gas group OMV plans to extend a 4 billion euro ($4.35 billion) cost-cutting program, its chief executive said, adding it may cut jobs due to the coronavirus crisis and a slump in energy prices.

Major oil producers with operations around the world have cut their 2020 capital spending by about 25%, or nearly $55 billion, following the drop in crude prices.

"I expect... further cost savings programs this year," OMV chief executive Rainer Seele told German daily Handelsblatt in an interview published on Wednesday.

OMV has already said it would cut spending by about 20% this year and has reached a deal to pay for its $4.7 billion stake increase in plastics maker Borealis in stages.

"We have not yet made a decision about short-time work or staff reductions. It is a possibility we cannot rule out," the company's CEO told Handelsblatt.

OMV, which has a global workforce of around 20,000, said its output fell to 472,000 barrels of oil equivalent per day in the first quarter from 505,000 boe/d in the fourth quarter.

The average realized crude oil price fell to $46.8 in January-March, from $61 in the three months through December, said OMV, which will publish first-quarter results on April 29. ($1 = 0.9203 euros) (Reporting by Kirsti Knolle Editing by Madeline Chambers and Alexander Smith)

Borealiscrude oil priceenergy

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