Chevron Press Release - Reorganization Proposed For Chevron's Gulf Of Mexico Shelf Business Unit
NEW ORLEANS, Jan. 26, 1999 -- Chevron USA Production Co.'s Gulf of Mexico Shelf Business Unit will reorganize and reduce its staff by approximately 60-75 positions over the next 2-3 months in an effort to streamline operations and decrease operating expenses to meet business needs in today's environment.
The restructuring is part of an effort to reduce Shelf operating costs by $40-50 million in 1999. It is also part of a corporation-wide effort to cut $500 million in operating expenses this year as described by Chevron Chairman Ken Derr during his annual address to employees, Jan. 12. The reductions are intended to ensure Chevron's competitiveness in the fiscally tight oil and gas industry. In recent months crude oil prices have dropped to historically low levels.
David Dunn, vice president for Gulf of Mexico Shelf Business Unit, announced the proposed reorganization to employees at 8 a.m., CST today. Managers and supervisors in the New Orleans and Lafayette offices provided information regarding the planned reorganization to the Shelf Business Unit's 1,369 employees.
"Reducing the work force is never easy but it is something that we must do to help contain costs and remain competitive." said Dunn. "This is a continuation of the things we have been doing and takes advantage of some opportunities that are obvious. We were very successful with our efforts in '98 and we must continue to make changes"
Major components of the reorganization include consolidation of Harvest teams under one manager to more efficiently operate Chevron's most mature fields in the Gulf. Also, three profit centers, currently two in New Orleans and one in Lafayette, will be condensed into two profit centers, one at each location.
Although no specific positions have yet been identified for elimination, 50-60 of the reductions will take place in New Orleans. The Lafayette office will also be reduced by 10-15 positions. Reductions will cut across most organizational strata, affecting managers, supervisors, engineers, technicians and support personnel.
Several severance program options are currently being evaluated and details of the final plans will be announced in the coming weeks. Historically severance packages have included opportunities for employee redeployment and outplacement services. The reorganization will be complete in the next few months.
"No one should imply from this belt-tightening that Chevron is retracting from the Gulf of Mexico," said Dunn. "In the long term, the Gulf remains one of the top core businesses for Chevron. We remain committed to doing business in Louisiana and the Gulf of Mexico, and we will have a significant capital program for the Shelf in 1999 in excess of $400 million."
Updated: January 1999