Tullow Oil cuts a third of its Dublin workforce

Tullow Oil says it is making "about a third" of the more than 140 staff at its Dublin offices redundant, as the company slashes its cost base to deal with lower oil prices.

The staff who are leaving were informed late last week, following a consultation period that started in early March.

There had been rumours within the industry that Tullow was preparing to let go more than 40 per cent of its Irish-based workforce, but the company insisted on Monday that the number due to depart is “about 46”.

Many of those leaving are highly paid members of its exploration team, including geologists and others in skilled science-based roles.

Collapsed

Tullow, whose share price and profitability collapsed along with the price of oil, is seeking to remove about $500 million (€466m) in annual costs from the group, and it has also initiated redundancy schemes at some of its African subsidiaries, such as in Ghana.

Chief executive Aidan Heavey has said the company, which recently reported an annual loss of about $2 billion, needs to be able to cope with oil prices of $50 a barrell "long-term".

The group is paring back its exploration efforts – much of which were conducted from Dublin – in favour of more production, which will give it more cashflow to manage its debts.

Refocused

The company has refocused much of its activity away from higher-cost locations, such as the North Sea, and it will instead redouble its efforts at developing many of its African producing assets, where Mr Heavey says it can get oil out of the ground for as little as “$12 a barrel”.

The group has ben the subject of feverish speculation in recent weeks and months, as the markets try to identify the next oil industry takeover candidates following Shell's £47 billion offer for BG Group.

Tullow is sitting on huge reserves in Africa and its share price, at about £4, is just a fraction of where it was two years ago.

This has made the company a favourite to be taken out by European traders.

The company is thought to be prepared to fight for its independence, however.