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Mass layoffs hit BP Whiting Refinery for first time in 17 years

BP's Whiting Refinery is shown in operation in 2011. The refinery is laying off 50 to 80 salaried workers.

The BP Whiting Refinery, one of Northwest Indiana's largest and most stable industrial employers, plans to lay off up to 80 salaried employees amid a global slump in the oil business.

It's the first mass layoff at the refinery, which has benefited from high oil and gas prices, since the Clinton administration back in the 20th century.

"At this time, we expect a workforce reduction in the range of 50 to 80 salaried employees," BP spokesman Michael Abendhoff said. "The announcement today does not include the represented hourly and salaried workforce. BP will comply with its collective bargaining commitments."

United Steelworkers District 7 Director Mike Millsap said contractors were also being laid off, but that the cuts would not impact the union steelworkers who operate the refinery.

The refinery, the main source of gasoline for the Midwest, employs about 1,850 workers and hundreds of contractors doing maintenance work at any given time.

"Our contractor workforce varies regularly because of maintenance and turnaround work," Abendhoff said.

BP has not done a mass layoff at the BP Whiting Refinery since a downturn in 1999, according to Times of Northwest Indiana archives. The refinery was still called the BP Amoco Refinery back then.

In 1999, BP laid off fewer than 50 salaried workers and was looking to cut an additional 200 hourly workers, in what would have been the first layoffs of hourly workers at the refinery in 35 years. The union and company struck a bargain where 249 workers accepted voluntary severance.

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But times have been tough for the London-based energy giant. Crude oil prices had consistently been more than $100 a barrel until January 2014, when they nose-dived because of weakened international demand, especially in China. Crude oil is now trading at around $45 a barrel.

BP also grappled with about $55 billion in expenses from its 2010 Deepwater Horizon spill into the Gulf of Mexico.

Last year, the company lost $6.5 billion, the largest annual loss in its history. Executives pledged to reduce expenses by cutting 7,000 jobs, or about 9 percent of BP's global workforce, by 2018.

Most of BP's layoffs to date had been in the upstream part of the business that focuses on new oil exploration. The downstream side that includes the Whiting Refinery usually does well when crude oil prices are low because consumers respond by buying more cheap gas.

But now cutbacks are coming to the former Standard Oil Refinery on Lake Michigan as well.

"We are always looking at our business to make sure that we have the right people in the right roles to operate efficiently, safely and reliably," Abendhoff said. "BP is committed to treating employees with respect and dignity throughout this organizational change."

BP is not alone in shedding jobs. The trade publication Oilprice.com estimates that oil and gas companies have laid off more than 350,000 workers worldwide since crude oil prices crashed two years ago.

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Business Reporter

Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.