T

he local operations of global oil and gas giants Chevron Pacific Indonesia and Japan’s Inpex are laying off workers to cut costs amid a global oil slump.

The Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) revealed that Chevron had already reduced its number of employees by 750, half of a plan to cut a total 1,500 workers between January and April this year.

“Most oil and gas companies are in the process of downsizing because of the current oil prices. They have to, or else they would not stay competitive. However, not all of them have resorted to reducing the workforce, which really is a last resort after other efficiency measures, such as reducing operational costs,” SKKMigas spokesperson Elan Biantoro said.

There are currently more than 32,000 people working in Indonesia’s oil and gas sector, Elan said, adding that Chevron was the only company making drastic reductions to staff.

Chevron Pacific Indonesia senior vice president Yanto Sianipar confirmed that the company was allowing voluntary redundancies after a business model review last year suggested the firm would operate better with fewer employees than the current 6,300.

“There have been no terminations, we have merely offered our employees the chance to resign through an early retirement program. It’s not only based on the economic situation of oil, it’s also based on a review of our 2015 business model,” Yanto told The Jakarta Post on Tuesday.

He added that employees who voluntarily resigned or opted for an early retirement plan would be compensated an undisclosed amount.

The Energy and Mineral Resources Ministry has objected to Chevron’s plan to reduce its workforce by 1,500 in the first four months of this year and urged the oil company to reduce its workforce naturally through retirement plans.

Chevron is the largest oil producer in the country and aims to produce 243,000 barrels of oil per day (bopd). The national target is 830,000 bopd this year.

Although oil and gas prices have rebounded slightly recently, they remain low on a global glut. Benchmark West Texas Intermediate (WTI) crude was at US$40.08 per barrel and Brent crude at $43.25 per barrel, losing almost a third of its peak value of $115 per barrel in 2014.

Meanwhile, Inpex confirmed it was also looking to reduce its workforce following a delay in the Masela gas block project.

Inpex’s senior manager of communications and relations, Usman Slamet, said that the company had on Monday offered its employees voluntary redundancies in order to maintain the economic viability of the Masela project.

The government recently demanded the project be developed onshore, forcing Inpex and its Anglo-Dutch partner Shell to revise their plan of development, which had assumed offshore development.

“With a heavy heart, Inpex has [offered voluntary redundancies] in order to preserve the economic viability of the project in relation to the current business conditions and project status. We need to optimize our organization,” Usman said, without disclosing the number of employees Inpex expected to lose.

SKKMigas head Amien Sunaryadi previously said that Inpex planned to downsize its workforce by 40 percent, representing around 400 workers.