Nabors cuts nearly 3,500 jobs as U.S. drilling takes big hit

HOUSTON – Nabors Industries  has cut 12 percent of its 29,000-employee workforce as oil producers continue to send U.S. land rigs to the sidelines, the drilling contractor’s CEO said Tuesday.

That includes a 10-percent cut from its sales staff and a 20-percent reduction in its U.S. drilling workforce, or about 3,480 jobs,  Nabors CEO Anthony Petrello told investors said in a quarterly conference call, adding the firm is preparing for the possibility of a long-term downturn in oil prices.

“We are not counting on the ‘V,'” Petrello said, referring to a potential V-shaped — or rapid — recovery in oil prices that would alleviate much of the industry’s ongoing pain in lost profits and jobs. Nabors has slashed its capital budget 50 percent to about $1 billion. It has targeted a 15-percent cut in operating costs this year. 

The Bermuda-based driller, which has its main offices in Houston, saw  average utilization for its U.S. rigs  fall to 78 percent in the fourth quarter. It took $408 million in asset impairments in the United States.  Nabors’ active U.S. rig count has fallen 32 percent from its peak last year, Petrello said.

“They are shedding rigs based on a lack of long-term contracts and not performance,” Petrello said. Nabors chief financial officer William Restrepo said the firm expects the U.S. rig count to decline 50 percent from its peak.