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Alaska News

Two Alaska oil field support companies announce layoffs

  • Author: Alex DeMarban
  • Updated: September 28, 2016
  • Published April 4, 2016

Job losses continue to mount in the Alaska oil patch, with Parker Drilling and CH2M Hill recently informing the state, in separate announcements, of large cutbacks to their workforces on the North Slope.

Parker Drilling is cutting 55 employees, a "mass layoff" associated with a recent decision by BP to idle three rigs at Prudhoe Bay. The Texas-based company was a contractor that worked on the rigs.

"Parker Drilling did not anticipate this unfortunate turn of events and it is having a devastating impact upon our business operations," James Yaw, the company's human resources manager, said in a letter to the state Department of Labor and Workforce Development. Companies are required to notify the state of large layoffs.

Beset by low oil prices and reduced income, the oil and gas industry shed about 1,000 jobs in 2015, labor officials have said. That's about 7 percent of the industry's workforce.

Unemployment benefits are up sharply. The number of former industry workers receiving the benefits rose to 1,209 in February, up from 545 the year before.

Parker Drilling's letter was sent in response to a federal law requiring notice of mass layoffs, known as the Worker Adjustment and Retraining Notification Act.

BP announced in March it would reduce its working rig count from five to two, affecting rig operators Parker Drilling, Nordic-Calista Drilling and Doyon Drilling.

Yaw said the layoffs began March 19 and would continue until mid-May. Because the reductions are so large, Parker Drilling cannot offer severance pay or provide bumping rights to other positions in Parker Drilling, the letter said. Bumping rights give employees a chance to find other work in a company based on seniority, forcing less-senior workers out.

Officials with Parker Drilling did not return phone calls seeking comment on Monday.

Colorado-based engineering company CH2M Hill, which employs about 2,000 people in Alaska, said in a letter sent to the state labor department in mid-March that it was laying off 58 employees because it "was not selected" by Italian oil company Eni to provide "embedded manpower" for the company's operations on the North Slope.

The company was only recently informed of the lost contract that ends March 31, said Jeff Doyle, vice president of North Slope operations for CH2M Hill.

There are no bumping rights, the letter said.

"CH2M will also be working with affected employees to try and locate other opportunities within CH2M," the letter said.

Eni has announced it would delay additional drilling at its Nikaitchuq field until the end of this year. Production at the field was about 28,000 barrels of oil daily in 2015.

It was uncertain if that delay or other factors led to the loss of the contract for CH2M Hill.

"I don't have any details on the client business decision," said Lorrie Paul Crum, vice president of communications for CH2M Hill, based in Denver.

But Crum said the decision is related to low oil prices that have battered the oil and gas industry.

The layoffs come on top of roughly 20 office workers recently cut by CH2M Hill that were also tied to low oil prices. The company employs more than 24,000 people around the world, Crum said.

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