Unocal to cut 59 jobs

Posted: Wednesday, November 13, 2002

ANCHORAGE (AP) -- Unocal Alaska is cutting 59 jobs in Kenai and Anchorage and closing its Kenai office, in a move to increase the profitability of its Cook Inlet operations.

''We've been out there many, many years,'' Unocal spokeswoman Roxanne Sinz said. ''It's on the downside of the trend.''

The company had announced plans late last month to lay off and shuffle workers and to stop oil production at two of its 10 Cook Inlet platforms. Exploration will continue in Cook Inlet, but the company will shift its focus to the North Slope, Sinz said. Unocal has interests in the Kuparuk and Endicott fields operated by other oil companies, and undeveloped North Slope holdings.

Unocal Corp. is one of the country's largest natural gas and oil exploration and production companies. Based in El Segundo, Calif., Unocal's principal production operations are in North America and Asia.

''As we studied the costs, operations and exploration opportunities, it became clear that, to have a viable business in the Cook Inlet, we had to make significant changes now or face even more serious challenges in the future,'' Unocal Alaska vice president Chuck Pierce said. In 2000 the company sold its ammonia and urea plant in Nikiski to Agrium.

The contraction of operations in Cook Inlet means 47 layoffs and the elimination of 12 contract positions, Sinz said, affecting about 18 percent of Unocal Alaska's work force.

At the end of October, Unocal employed 260 people in Kenai and 87 in Anchorage, as well as about 165 independent contractors.

The Dillon and Baker platforms targeted for ''shutting in'' are at either end of the Middle Ground Shoal southwest of Anchorage, offshore from Nikiski. The company will stop using them to produce oil, and they will be unmanned, but not abandoned.

Abandonment triggers state law requiring that they be dismantled.

Instead, crews will monitor them from neighboring platforms. Baker will continue to produce gas while Dillon will be an active part of Inlet infrastructure, including interplatform pipelines.

Sinz said shut-in costs are still under evaluation.

Dillon will cease oil production by the end of the year, and Baker by the end of March, Sinz said. Over the last few months, Dillon has produced an average of 500 barrels of oil per day, Baker about 560.

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