Lacking contract, Seadrill to cut 162 workers
Seadrill plans to lay off 162 workers after the U.K.-based offshore driller couldn’t secure a new contract for one of its drillships.
The company’s Houston office informed Mayor Sylvester Turner and the Texas Workforce Commission last month that workers on its West Neptune drillship in the Gulf of Mexico would be laid off in the coming months after the contract ends. Layoffs began this month and will be completed by the end of May, Seadrill said.
“The West Neptune will soon complete operations under its current contract and is anticipated to be cold stacked (mothballed),” Seadrill said in a Feb. 8 letter, which was made public Monday. “The inability to secure additional work for the West Neptune in the face of the current market and other conditions is sudden (and) unexpected, and outside of Seadrill’s control.”
Oil exploration and production companies have been hammered by the coronavirus-driven oil bust, which has plunged demand for petroleum products such as gasoline and jet fuel. Offshore drillers, in particular, have been hardest hit as deep-water wells require large upfront costs.
For the second time in four years, Seadrill and some of its subsidiaries filed for Chapter 11 bankruptcy last month in the Southern District of Texas. The company reported a $4.7 billion loss in 2020 and has $6.2 billion of debt coming due within this year.
Seadrill last summer laid off 135 workers on its Sevan Louisiana rig and 168 on its West Auriga rig in the Gulf of Mexico. Houston-based Transocean last year laid off a combined 220 workers on its Deepwater Asgard and Discoverer Inspiration drillships in the Gulf.
There are 13 offshore rigs operating in the Gulf, down from 19 a year ago, according to oil field services giant Baker Hughes and research firm Enverus. U.S. oil production in the Gulf last year fell by 13 percent from 2019 to 1.65 million barrels per day, the largest drop of any major American oil field, according to the Department of Energy.