Royal Dutch Shell confirmed on Tuesday that it plans to move about 50 New Orleans-based jobs to Houston next year, but said it is committed to keeping its core deepwater operations in the city long-term.
The company, which is headquartered in The Hague, Netherlands, said that the jobs being relocated to Shell’s North American headquarters in Texas are primarily from the subsurface and seismic processing teams.
A spokesman for Shell in New Orleans, Paul Hagel, said that the job-shuffle is a routine adjustment for the company and should not be seen as affecting the company’s long-term commitment to the city as headquarters of its deepwater operations for the Gulf of Mexico, Brazil, Malaysia and elsewhere.
“The move is aimed at co-locating teams that are already working together to optimize our footprint and add focus,” he said of the jobs relocation.
Shell New Orleans currently employs about 1,000 people, mostly located on nine floors at the Hancock Whitney Center on Poydras Street in the Central Business District, formerly One Shell Square.
In the wake of the 2014 oil price collapse, Shell slashed its Gulf of Mexico workforce by about 25%, or 150 jobs, as part of a global job-cutting program. It also relinquished the naming rights in 2017 for One Shell Square, the 51-story building where its staff once occupied most floors.
The name-change for New Orleans’ largest skyscraper has been widely cited as symbolic of the declining fortunes of oil and gas in the state’s economy, where at its peak in the 1970s it employed more than 100,000 people.
The Louisiana oil and gas sector now employs about 40,000, of which Shell accounts for 10%, or nearly 4,000, working in New Orleans and at refining and petrochemicals, pipeline and logistics operations in various parts of the state.
Shell Louisiana makes up about 24% of Shell’s U.S. workforce and 5% of its global total of 85,000, but accounts for 50% of U.S. oil production and 20% of the company’s global earnings, Hagel points out.
That’s largely due to its role running Shell’s nine major deepwater assets in the Gulf of Mexico, where it vies with BP as the largest operator. Shell Gulf of Mexico last year produced the equivalent of about 300,000 barrels per day of oil and gas, which was slightly more than half the total for Shell U.S.
Overall, U.S. oil production in federal Gulf of Mexico waters reached a record 1.74 million barrels per day last year, according to the U.S. Energy Information Administration. That puts it second only to Texas, where output has increased fivefold in the past decade, to about five million barrels per day, because of the boom in shale oil.
Though Hagel said the company is keeping its deepwater headquarters in New Orleans, many other oil companies have moved all or part of their operations to Texas in recent years as business has boomed there, especially companies that specialize in providing upstream equipment for the industry.
Last year, for example, oil services company Tidewater, which had been headquartered at the Pan American Life Center on Poydras Street for six decades, moved its last few dozen employees to Houston.
Hagel notes, however, that Shell has committed to additional investment in the region recently, pointing to the $20 million, 92,000 square-foot offshore support warehouse it is building on 33 acres on the east side of Houma. That facility will employ about 15 full-time workers.
Shell also has invested heavily just in the last few years in the technology it uses to run its deepwater operations remotely from the Hancock Whitney Center. Referred to internally as “the bridge,” the high-tech operations center at Shell’s New Orleans headquarters would be costly and complex to relocate.
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