Oilpatch pain persists as Cenovus to cut 300 to 400 more jobs this year

Cenovus Energy says 300 to 400 workers will be let go from its Calgary office by year end as hopes for a quick recovery in oil prices evaporate.

CALGARY — Cenovus Energy says 300 to 400 workers will be let go from its Calgary office by year end as hopes for a quick recovery in oil prices evaporate.

The cuts announced Thursday are on top of 800 positions Cenovus eliminated in February.

“It is always difficult when we have to let good staff members go. We take these decisions very seriously,” CEO Brian Ferguson told analysts on a conference call.

“These workforce reductions are directly related to a more focused pace of work in response to the continued low price environment.”

A rebound in crude prices to around the US$60 a barrel mark in May and June proved to be short lived. U.S. benchmark crude prices have been below US$50 a barrel in recent weeks, about half of what it fetched a year earlier.

In addition to the head office jobs, the oil producer is also looking to trim its workforce in the field in early 2016.

The reduction is expected to save Cenovus about $100 million annually, on top of the $280 million in cost savings it is already targeting for this year.

Cenovus (TSX:CVE) is also reducing its quarterly dividend by 40 per cent to 16 cents a share.

The company has “stress tested” its financial strength at US$50 oil prices through 2017 and believes it can fund its new dividend and invest in its operations without harming its balance sheet.

The company posted an 80 per cent reduction in net earnings for the second quarter to $126 million from $615 million a year earlier.

Meanwhile, global energy giant Royal Dutch Shell PLC said it expects to have cut 6,500 positions by the end of this year.

Some 700 of those cuts have been in Shell’s Canadian heavy oil business, affecting both staff and contractors, said Shell Canada spokesman Cameron Yost. The roughly 300 positions eliminated at Shell’s oilsands mining operations earlier this year are included in that figure.

Oilsands giant Suncor Energy (TSX:SU) says it has reduced its headcount by about 1,300 this year.

Late Wednesday, Suncor announced it would be paring a further $400 million from this year’s budget to between $5.8 billion and $6.4 billion.

It’s the second time this year Suncor has slashed its budget. In January it announced it would reduce its budget by $1 billion to between $6.2 billion and $6.8 billion.

CEO Steve Williams told a conference call there’s not much room for more cuts this year.

“This is not slashing and burning. One of the issues with slashing and burning capital budgets is it comes with a price later. So it’s been a very measured reduction where we’re still getting the maintenance on the plants we want, where we’re still getting the growth projects we want fully funded,” he said.

“So it’s a grinding process of working these costs out through individual contract-type negotiations. So you’ve seen the majority of it. It’s possible you could see even more deflation as the year goes on, but our work program is largely fixed, contracted and in place now.”

Suncor netted $729 million during the second quarter, compared to $211 million a year earlier, which it booked impairment charges.

Just Posted

One strong wind leaves years of replanting work for Red Deer parks staff

High visibility boulevards already replanted, neighbourhood work starts next year

Red Deer-area indigenous filmmakers invited to apply for $20,000 grant

Storyhive launches Indigenous Storyteller Edition

Restaurant closed after compliance team patrol

Public Safety Compliance Team checked eight bars and restaurants on Oct. 19

Red Deerians await local cannabis stores

So far 31 stores in Alberta awarded licence to operate

Rimbey RCMP seek missing man with health concerns

Has anyone seen Bill Harris of Ponka County?

WATCH: Make-A-Wish grants Star Wars loving teen’s wish

The Make-A-Wish Foundation granted Anakin Suerink’s wish in Red Deer Saturday afternoon

‘Halloween’ scares up $77.5 million in ticket sales

LOS ANGELES — Forty years after he first appeared in theatres, Michael… Continue reading

iPhone XR makes the right trade-offs for a cheaper price

NEW YORK — Apple offers you a simple trade-off with its new… Continue reading

BMW to recall 1.6 million vehicles worldwide over fire risk

FRANKFURT — Automaker BMW says it is expanding a recall to cover… Continue reading

Calgary awaits federal financing on 2026, Notley suggests IOC could pay more

CALGARY — With the clock ticking towards a Calgary vote on hosting… Continue reading

Toronto Mayor John Tory cruises to victory; tech issues extend voting elsewhere

Toronto Mayor John Tory easily won re-election on Monday after a spirited… Continue reading

Local Sports: Rudy Soffo valuable to Kings on the court

When Rudy Soffo first saw the RDC basketball Kings roster he was… Continue reading

Except for 1 kick, Saints, Ravens are evenly matched

BALTIMORE — In a matchup between the league’s highest-scoring offence and top-ranked… Continue reading

Julia Louis-Dreyfus gets a top award for comedy

WASHINGTON — After a 35-year acting career and with two iconic television… Continue reading

Most Read