Kern County oil companies dramatically cut spending, reduce workforce
BAKERSFIELD, Calif. (KBAK/KBFX) - Nationally, oil and gas companies are in an unprecedented financial crisis. Oil is now selling for below $25 a barrel in Kern County, as Saudi Arabia and Russia continue to flood the market and drive down the price of oil, and COVID-19 quarantines keep people from needing to purchase fuel.
Chad Hathaway, owner of Hathaway LLC, a private oil producer with more than 200 wells in the Central Valley, has shut down around a quarter of his operations and reduced his workforce from 27 to fewer than 15 employees.
"We cut a lot of people down to part time," Hathaway added. "We're just trying to work with our banks, working with vendors, working with everybody that we can work with to try get through this," he said.
Industry-wide, companies are dramatically scaling back their budgets.
Chevron expects to reduce capital spending this year by $16 billion. Berry Petroleum is slashing its spending by 50 percent. The California Resources Corporation is reducing the number of hours their employees work, in place of layoffs.
"The impact is almost overwhelming to think about," Cathy Reheis-Boyd, president of Western States Petroleum Association, said. "I just get so concerned about not only people having to deal with the situation of COVID-19, but on top of that, having to thing about whether they're going to have a paycheck tomorrow," she said
