Chevron cutting more than 100 oil industry jobs in North Dakota with Hess merger

FARGO (North Dakota Monitor) — Oil producer Chevron is laying off more than 100 workers in North Dakota after acquiring Hess Corp., a greater impact than initially expected.

Chevron notified Job Service North Dakota that it would lay off 111 workers — 63 in Minot and 48 at Tioga — beginning Sept. 26.

Chevron completed its merger with Hess July 18, driving the layoffs. The company initially told the state there would be 70 layoffs, but revised that number higher this week.

“We understand the impact this news may have on employees, their families and the communities where we operate,” Chevron said in a statement. “Our priority is to support our employees through this transition. We are offering severance benefits and outplacement support.”

A Chevron spokesperson said the cuts included a variety of positions.

Ron Ness, president of the North Dakota Petroleum Council, said Chevron’s takeover of Hess is one of several mergers in the oil and gas industry as companies seek to be more efficient in the face of lower oil prices.

“Consolidation is part of the industry trend to try to lower your per barrel costs,” Ness said.

Reuters reported last month that cutbacks in the U.S. oil and gas industry have been widespread.

Phil Davis, Workforce Services director for North Dakota Job Service, said the agency has not seen an increase in traffic at its Workforce Centers in Minot and Williston, which may be an indication that laid off workers have already found employment.

A state report on North Dakota’s oil and gas economy shows 1,013 job openings in North Dakota’s four core oil and gas producing counties in August, down more than 2% from August and down more than 13% from a year ago.

The report notes that the price of North Dakota oil is about 16% below last year’s levels.

“The price of oil still has a major influence on the amount of activity, the amount of work out there,” Ness said. “We’ve probably seen a little bit of a dip.”

North Dakota has 32 active drilling rigs this week, compared to 39 one year ago, according to the North Dakota Department of Mineral Resources.

North Dakota is the nation’s No. 3 oil producing state.

At the North Dakota Petroleum Council’s annual meeting last month in Watford City, Chevron Vice President Kim McHugh said the company is committed to developing in shale oil formations like North Dakota’s Bakken.

“The Bakken fits nicely into our portfolio,” she said.

North Dakota’s unemployment rate remains low at about 2.5%.

North Dakota Monitor reporter Jacob Orledge contributed to this article. 

Reach North Dakota Monitor Deputy Editor Jeff Beach at jbeach@northdakotamonitor.com.

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