Gas firm’s future ‘under review’
ConocoPhillips plans layoffs; effects on local economy unpredictable
A ConocoPhillips spokesperson said no decision has been made on whether planned layoffs and spending cuts by the company might result in reduced drilling operations in western Colorado’s Piceance Basin.
Company representative Jim Lowry said Monday that spending levels per business unit have yet to be determined.
“That’s still under review,” he said.
The Houston-based company announced Friday it would be cutting its workforce by about 4 percent, or about 1,300 jobs, and that it would reduce its number of contractors by an unspecified amount.
It also announced a $12.5 billion capital budget, a reduction from 2008.
“Our planned 2009 capital program is structured to continue funding significant projects that will grow and develop the company, while deferring or slowing some projects and other programs,” chairman and chief executive officer Jim Mulva said in a news release Friday.
ConocoPhillips and other energy companies have been coping with a precipitous drop in fuel prices. The problem is exacerbated for natural gas produced in western Colorado because of a lack of pipeline capacity to get gas to more lucrative markets across the country.
Numerous companies, among them Williams Production RMT and EnCana Oil & Gas (USA), have announced plans to reduce drilling rig counts in and around Garfield County, which leads Colorado in drilling activity. Companies also have cited factors including tighter lending markets and concerns associated with stricter oil and gas development rules being implemented in Colorado.
ConocoPhillips was operating five rigs earlier last year north of Parachute. As of early December, it was down to one rig but was expecting another to be delivered.
“We’re going to continue ahead with our project,” Derek Wagner, a company representative, said then at a meeting of the Northwest Colorado Oil & Gas Forum.
At the time, the company had between 75 and 100 people working out of temporary living quarters at its Parachute operations.
ConocoPhillips says it will elaborate on this year’s spending plans in early March.