Oil Slump Slams Mexico with 10,000 Job Losses Adam Williams and Andrea Navarro - Bloomberg News
go to original January 14, 2015

Workers from Oceanografia SA, an oil engineering services company, stand on a connecting bridge of the Petroleos Mexicanos (Pemex) Pol-A Platform complex, located on the continental shelf in the Gulf of Mexico, 70 kilometers offshore from Ciudad del Carmen, Mexico. (Susana Gonzalez/Bloomberg)

More than 10,000 people working at Mexican oil service companies were laid off this week as state-owned Petroleos Mexicanos cut contracts in the face of the global slump in crude prices. More job losses are expected.

Most of the companies are based in Ciudad del Carmen, on the Campeche Bay in the Gulf of Mexico, and were told this week that contracts wouldn’t be renewed with Pemex, as the world’s ninth largest oil producer is known. Job losses could rise to 50,000, Gonzalo Hernandez, secretary at the Ciudad del Carmen Economic Development Chamber, said in a phone interview.

“The city is in shock,” Stuart Hill, managing director of Xperto Offshore in Mexico, said in an interview from Ciudad del Carmen. “We were told it was based on Pemex’s budget reductions.”
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While a Pemex official said the contract cancellations won’t reduce oil output, they come as some U.S. producers bail out of long-term contracts for drilling rigs as prices slide below $50 a barrel. Oil is trading near the lowest levels since April 2009 amid concern that a global supply surplus will persist this year.

Oil production at Pemex fell for the 10th straight year in 2014. The company posted a net loss of about $4.4 billion in the third quarter, its eighth consecutive quarterly loss.

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