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Business

Chevron sheds jobs as low oil prices hit

US oil giant Chevron has announced job losses amounting to about 10 percent of its workforce as lower oil prices are cutting deeply into profit. Reduced capital and exploratory spending is also in the pipeline.

Chevron said Friday it was going to cut between 6,000 and 7,000 jobs and continue with asset sales as the company was forced to downsize amid sharply lower oil prices.

The layoffs at the United States second biggest oil firm behind Exxon Mobil are part of a major downsizing drive that also includes lower capital expenditure.

Spending on investment would be reduced by 25 percent next year, Chevron said, to reach a total of $28 billion (25.4 billion euros) "at most."

"We expect further reductions in spending for 2017 and 2018, to the $20 to $24 billion range, depending on business conditions at the time," chairman and chief executive John Watson said in a statement.

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Oil price tumble to continue

Profit slump and asset sales

The San Ramon, Cal.-based company reported a 63.6 percent fall in earnings to $2.04 billion in the quarter to September 30 compared to a year ago.

Upstream earnings, meaning oil exploration and production, barely cleared a profit, with just $59 million, against $4.65 billion a year ago. Profits were mainly supported by downstream operations, which earned $2.21 billion.

Chevron attributed the profit slump primarily to the plunge in global oil prices which have fallen from over $100 in June 2014 to under $50 this month.

Looking ahead, CEO Watson said the company was focused on "improving results by changing outcomes within our control." This would include asset sales to the tune of $5 billion to $10 billion through 2017, after Chevron had already earned $11 billion from sales over the past two years. In addition, operating and administrative costs were 7 percent lower than last year, and further reductions were likely.

This week, a raft of other energy companies, including ConocoPhillips and Total, either delayed, trimmed or axed projects in response to sliding profits and sharply lower energy prices.

uhe/nz (Reuters, AFP)

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