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Arrow Energy axes jobs at CSG project

World Coal,

Approximately 250 jobs are believed to have been cut from Shell’s Arrow Energy coal seam gas project in Queensland, Australia.

According to The Australian, the cuts, which will be made to a workforce of 1200, come following ongoing concerns about the economics of the project’s proposed AU$ 20 billion liquefied natural gas (LNG) plant.

Earlier suggestions hinted that up to 600 people would be fired as part of the restructuring, however The Australian understands that the total job losses will reach 250.

Shell and its 50% partner in the project, Chinese oil and gas giant PetroChina, have struggled to make the Arrow project economically viable at a time of significant cost inflation in the global LNG industry.

A spokesman for Arrow confirmed the company had "conducted a review of staffing levels as it manages costs".

"While the company acknowledges this will be a difficult time for employees, it is committed to supporting them through this transition," the spokesman said.

"The company remains focused on finding additional value and reducing overall costs. Arrow will continue to assess development options, including collaboration opportunities, as it looks to develop significant gas reserves."

The cost pressures have been particularly felt in Gladstone, central Queensland, where the Arrow LNG plant was proposed. Three other LNG projects are already under construction there, putting pressure on wages, services and infrastructure.

Edited from various sources by Katie Woodward

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