Energy job cuts add to industry pain

Oil field service giant Schlumberger on Friday said it plans to cut an undisclosed number of jobs in Houston as the oil crash continues to ravage the industry so vital to the city and Texas.

Schlumberger officials said the economic fallout of the coronavirus pandemic forced the company to speed up a restructuring plan for its shale operations in North America.

Over the past three weeks, Schlumberger cut 125 jobs while closing plants in Moore, Okla., Corpus Christi and the Eagle Ford Shale play.

In a statement, company officials said “much of our operational capacity is unneeded, and some of our facilities are underutilized.”

Schlumberger had 103,000 employees at the beginning of May. Last month, as the company announced its $7.4 billion first-quarter loss, it said that it laid off 1,500 people in North America during those three months.

The company also cut wages, furloughed workers and slashed its budget in March as the pandemic and a price war combined to squeeze the industry, forcing many of the company’s customers — production companies — to further slash their output.

Evidence of production cuts continues to mount in oil fields around the nation and especially in Texas, where the number of operating rigs declined for a ninthstraight week.

There are 374 rigs at work in the U.S., about a third of the 988 operating a year ago, Baker Hughes said Friday in its weekly report, a barometer of oil and gas production in the U.S.

With the seven-day loss of 34 rigs, there are fewer at work now than there were at the depth of the 2014-16 oil bust.

Most of the rig losses this week were in Texas, where operators idled 28. The state is host to about half of the nation’s oil and gas rigs.

EOG Resources on Friday said its rig shutdowns will cut its output by up to 225,000 barrels of oil per day during the next months. The Houston oil and gas producer said it also is delaying completing

about 150 new wells until the second half of the year.

Bill Thomas, EOG’s chief executive, said the company would rather shut down rigs and lower production than sell into a low-price market. The U.S. price of oil settled Friday at almost $25 after a second straight positive

week.

EOG’s announcement comes a day after it said it lost $9.8 million in the first quarter, down from $635.4 million in the same period last year. Like many energy companies in the industry that posted losses as revenues remained steady, EOG’s bottom line was pinched as it reduced the value of assets because of oil’s price collapse.

Also Friday, Irving oil company Pioneer Natural Resources said it would cut executive pay and slash other costs as it contends with oil’s collapse.

Pioneer made a $289 million profit in the first quarter but is bracing for financial pain in the second quarter.

CEO Scott Sheffield’s $1.25 million base salary will be cut by 20 percent while the pay of other executives

will be reduced by 15 percent and corporate officers take a 10 percent cut, according to a filing with the U.S. Securities and Exchange Commission.

The 12 members of Pioneer’s board of directors are taking a 20 percent cut on their annual $70,000 retainers while the company reduces matches to retirement plans for both employees and executives.