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 75 and 110 employees working on the Discoverer Inspiration, an ultra-deepwater drillship operating in international waters off the Gulf of Mexico, will be laid off after its contract ends. Layoffs are expected to begin on Sept. 15, and affected workers will receive severance, Transocean told the Texas Workforce Commission last week.
“In the event that (Transocean) obtains a contract for additional work utilising the Discoverer Inspiration, the Company may recall a percentage of the employees who were released from the Discoverer Inspiration; 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, diesel 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.
Diamond Offshore Drilling, a Houston-based rig contractor, filed for Chapter 11 bankruptcy in April, shortly after oil prices collapsed. Seadrill last month said it plans to lay off 135 workers on its Sevan Louisiana Rig in the Gulf of Mexico after its contract ends this summer.
Spending on offshore oil and natural gas drilling is projected to hit $23.4 billion this year, down 15 percent from the $27.5 billion in spending in 2019, according to a Energy and Industrial Advisory Partners report commissioned by the National Ocean Industries Association.
This article first appeared on the Houston Chronicle – an Energy Voice content partner. For more from the Houston Chronicle click here.