HOUSTON — Marathon Oil Corp. is shedding 40 jobs as it scales back plans to explore for oil and gas in conventional plays, the company confirmed Thursday.
The Houston oil company said it plans to suspend new venture funding for its conventional exploration program and re-direct the funds to its oil fields in the Gulf of Mexico and off the coast of West Africa. It doesn’t plan to drill any conventional exploration wells next year.
The job cuts, primarily in the United States, are a small addition to Marathon’s layoff of 400 employees earlier this year, and will bring staff reductions to 13 percent of its workforce. Employees were notified of the additional layoffs this week. Some were geologists and engineers. Marathon had 3,300 employees at the end of 2014.
“A leaner and more focused conventional exploration team will drive execution and value capture in our existing Gulf of Mexico and Gabon opportunities but at substantially reduced spending,” Marathon spokeswoman Lee Warren said in an emailed statement.
The Gulf of Mexico and Gabon projects will continue to be staffed and it will explore in shale and other unconventional plays.
Marathon CEO Lee Tillman told investors at a Barclays conference this week the company is in the early stages of planning its 2016 capital budget but it has already found $600 million it can trim.
He said the company is spending $100 million on its conventional exploration program next year, 60 percent less than the $250 million it spent on exploring those plays this year. It had spent $500 million in 2014.
“Every dollar is under scrutiny and there are simply no spend too small to challenge,” Tillman said. “And as we move through the second half of 2015 and into 2016, there will be more to come.”
Marathon’s main unconventional plays are in the Eagle Ford Shale in South Texas, the Bakken Shale in North Dakota and in Oklahoma. It has other conventional exploration prospects in Ethiopia, Kenya and the Kurdistan region in Iraq.