US independent Hess is set to slash its contract headcount by about 43% from May to the end of this year, to keep its spending in line with reduced activity amid the low oil price environment and weak market demand.
The company expects to cut its contractors from 2800 to 1600 by the end of 2020, Upstream has learned, and Hess also plans to eliminate about 180 employee positions across its operations and support functions.
The company had 1775 employees at the end of 2019.
Hess reported a second-quarter net loss of $320 million last month, compared with a net loss of $6 million in the second quarter of 2019, due to lower oil prices brought on by the drop in energy demand as a result of the Covid-19 pandemic.
Hess's $320 million loss in the second quarter of this year followed an already-steep $222 million loss posted in the fourth quarter of 2019, prior to the pandemic's effect.
The New York-based player tried to respond to the global oil glut in March by slashing its upstream budget for 2020 by 37% to $1.9 billion from the original budget of $3 billion, with the number of rigs in the core US shale patch of the Bakken in North Dakota cut from six to one.
Hess also recently launched a restructuring of its Denmark business, which includes its stake in the South Arne offshore oil and gas field, a spokesman confirmed to Upstream, adding that the company is in the middle of an employee consultation process.
The spokesman said Hess employs about 100 people in Denmark, roughly evenly split between onshore and offshore.
The restructuring will be focused on the company's office in Copenhagen.
While there are no expected impacts to the offshore headcount, there may be some changes to the workers' reporting relationship.
"We're certainly contemplating a smaller office in Copenhagen, and so that would mean more support out of Houston for that asset," the spokesman said.
Hess holds a 61.5% stake in South Arne and is operator, while partner Ineos holds a 36.8% interest and Denmark's Danoil has a 1.7% stake. South Arne currently produces an average of 8000 barrels of oil equivalent per day net to Hess.
The company also has a 4.8% interest in the Solsort development.