Kampala. At least 120 people in Uganda are the latest casualties of low global oil prices that have forced Tullow Uganda to downsize. In a rather drastic move, the company has decided to shrink employees by at least 88 per cent, majority of whom are Ugandans.
Daily Monitor has learnt that on Tuesday March 24, at least 120 Tullow Uganda staff were made redundant by the company.
The laid-off employees have been promised a severance package and advance salary of up-to three months, depending on the number of years they worked.
The low oil prices plunged Tullow Oil Plc into its first loss in 15 years. As a result, the company announced it would cut costs in order to become leaner. Uganda is one of those earmarked for the staff downsizing.
Tullow declined the opportunity to comment on the Uganda lay-offs when contacted via phone calls, emails and text messages.
Last month, Tullow announced that over the next three years, cost cutting initiatives such as reducing the head count would save it at least $500m (Shs1.5 trillion). Global oil prices fell from a high of $120 (Shs357,000) a barrel in September 2014 to an average of $50 (Shs148,750), forcing oil companies globally to adjust their expenditure plans.
“Oil prices fell dramatically in the second half of the year and the E&P (Exploration and Production) sector has been out of favour with investors for some time. It is not the first tough year that I, or Tullow, have faced over the past 30 years,” says Mr Aiden Heavey, CEO Tullow Oil Plc, in the 2014 annual report released last week.
In Ghana, the only country where Tullow is in active production on the African continent, the company announced job cuts despite opposition from government. In Ireland, where Tullow is originally from, another 50 workers are set to lose their jobs.
This is not the first time Tullow is reducing headcount in Uganda. In March 2014, the company let go of 41 of its staff. This reduced the workforce from 177 to 136, of which 88 per cent are Ugandans.
Unconfirmed reports also indicate Total E&P Uganda could also downsize its staff due to a mixture of low oil prices and delay in issuing production licences.
Mr Francois Rafin, the general manager Total E&P Uganda, was recalled to Paris in January 2015 after only being in the job for less than nine months.
The government and the oil companies have been engaged in back and forth meetings regarding the status of the applications for production licences.
Impact in Uganda
Double jeopardy: In Uganda, the oil companies are faced with double trouble: reduced oil prices and delayed granting of production licences.