Transocean Deepwater plans to lay off as many as 110 workers after the Houston offshore driller could not secure a new contract for one of its drillships amid low oil prices.
Between 50 and 110 working on the Deepwater Asgard, an ultra-deepwater drillship operating in the Gulf of Mexico, will be laid off after its contract ends. Layoffs are expected to begin on Dec. 15, and affected workers will receive severance, Transocean told the Texas Workforce Commission last Thursday.
“In the event that (Transocean) obtains a contract for additional work utilizing the Deepwater Asgard, the Company may recall a percentage of the employees who were released from the Deepwater Asgard; however, Transocean considers the layoffs to be permanent,” Transocean said in a letter to the state commission.
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 affected by recent oil busts as offshore oil is among the most expensive to produce, requiring large upfront capital and a longer return on investment.
Transocean in July said it plans to lay off as many as 110 workers on its Discoverer Inspiration drillship in the Gulf of Mexico. Its rival Seadrill in June said it plans to lay off 135 workers on its Sevan Louisiana Rig in the Gulf of Mexico.
There are 14 offshore rigs operating in the Gulf of Mexico, down from 22 rigs a year ago, according to oil-field services firm Baker Hughes and research firm Enverus.
Offshore spending this year is expected to plunge by 80 percent to $20 billion from $104 billion in 2019 commitments, according to Rystad, a Norwegian energy research firm. At the worst of the 2014-16 oil bust, offshore spending dropped to $38 billion.
This article first appeared on the Houston Chronicle – an Energy Voice content partner. For more from the Houston Chronicle click here.