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Chevron Corp. is planning to lay off up to 1,000 employees working in the neutral zone overseen by Saudi Arabia and Kuwait, as work in the oil field has been halted due to a dispute between both countries for several months, Wall Street Journal (WSJ) reported, citing unnamed sources familiar with the matter.
Saudi staff layoffs have already started, a source added. Chevron has also cut the number of petroleum-development rigs in the joint 2,230-square-mile area.
A Chevron spokeswoman said she couldn’t “discuss specific details of our employees and contractors.”
Difficulties in securing work permits and materials have impacted the company’s operations, forcing its local unit Saudi Chevron and Kuwait Gulf Oil Co. to stop onshore production in the neutral zone, she added.
The layoffs come less than two weeks after Chevron’s chairman and chief executive, John Watson, said he expects Kuwait to allow operations to continue while working out its dispute with Saudi Arabia.
It was not clear whether the layoffs are part of the company’s plant announced on October 30 to cut workforce by 6,000 to 7,000.
Chevron has run Saudi Arabia’s operations in the neutral zone since 2001, when it took over Texaco. It has faced difficulties there since the Saudis renewed its concession in 2009 for 30 more years without consulting Kuwaiti authorities.
The dispute escalated late last year, when Saudi Arabia halted operations at Khafji offshore deposits, which also lie in the shared neutral zone, over environmental concerns, without consulting Kuwait.
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