TRENTON, N.D. – One of the largest facilities in North Dakota that loads oil onto railcars laid off 10 percent of its staff this week as it pares operations in an environment of lower oil prices, a source familiar with the company’s operations said.
Savage Services Corp laid off 12 full-time employees at its 373-acre transloading and pipe logistics facility in Trenton, North Dakota, just outside Williston, the state oil capital, the source said.
The company said it has roughly 118 full-time employees.
Most of those laid off were of higher seniority and salary levels, the source said.
Utah-based Savage confirmed the layoffs at the facility, which can load more than 170,000 barrels of oil per day onto railcars. The company declined to say how many employees had been laid off, but said it had a “modest workforce reduction.”
“We value our employees and don’t make these decisions lightly,” Savage spokesman Jeff Hymas said. “We believe the company’s Trenton terminal continues to offer the best solution for safely and efficiently moving Bakken crude oil and other energy commodities by rail.”
Savage had told employees as recently as two weeks ago that there would be no layoffs, though the severance letters for the 12 were dated June 10, the source said.
The company’s spokesman Hymas said the date was a typographical error and had been subsequently clarified with employees.
The layoffs occurred as demand for railcars to transport North Dakota’s Bakken crude oil is at the lowest it has been in three years. The breakneck pace at which oil-by-rail transport grew since the U.S. shale boom began in 2008 has been tempered by the gradual construction of new pipelines.
Savage’s Trenton facility operates 24 hours per day, seven days per week, and historically has loaded two 118-railcar trains at once. That likely will be pared back to loading only one train at a time given the reduction in staff, the source said.
Railcars roll on a looped, 60,000-foot track through a warehouse where they are loaded with oil before heading out on a nearby BNSF line. The facility can store about 550,000 barrels of oil.
Much of the crude is bound for refineries on the East and West coasts, including facilities owned by Philadelphia Energy Solutions and PBF Energy Inc.
In addition to oil, the Trenton facility serves as a shipping hub for diesel, fracking fluids, sand and other oilfield-related products, as well as drilling pipe maintenance and storage.
Privately held Savage has more than 200 locations around the globe with roughly 3,500 employees.
(Reporting by Ernest Scheyder; Editing by Toni Reinhold)
This article was from Reuters and was legally licensed through the NewsCred publisher network.