Halliburton, which has an office in Red Deer, is suspending its well cementing operations in Alberta by the end of the year.
“We made this difficult decision because we do not foresee the ability for the product line to provide a sufficient rate of return,” said company spokeswoman Emily Mir in an email.
The suspension affects all of the company’s Western Canada cementing product service lines.
Halliburton operates its Alberta cementing line business out of offices in Calgary, Red Deer, Whitecourt and Grande Prairie.
How this move will affect Red Deer is unclear and the company did not respond to an email asking for more information.
“We will continue to provide specialty-cementing solutions, blends and chemical additives to our customers that require our proprietary products and processes. All of our other product lines that are currently working in Canada are still operating.”
Gary Mar, president of the Petroleum Services Association of Canada, said he was not familiar enough with Halliburton’s plans to comment on the potential impact of the company’s move, but said the oilfield services side of Alberta’s energy business continues to face tough times.
“This year was not a very good year,” said Mar.
His association forecast 5,000 wells would be drilled in Western Canada this year, down sharply from last year. Next year, the association is projecting only 4,500 new wells, including 2,155 in Alberta.
“For the oilfield services business, there is not an awful lot of good news,” said Mar.
The association and the Alberta and Saskatchewan governments believe the energy industry could be given a boost with federal government support for a stepped-up well reclamation program.
Mar said they would like to see the federal government approve “flow-through shares,” which allow companies to transfer resource expenses to the investor. The shares make it easier for companies to raise money while also providing tax advantages.
“That would actually create thousands of jobs in the oilfield services sector.”
Red Deer & District Chamber of Commerce executive director Rick More said the apparent loss of more local oilpatch jobs shows the uncertainty in the energy industry.
There was once a time when big oil companies were all opening new offices in Red Deer, More said.
“To see them pulling back is a bit disheartening, for sure.”
Many companies are in survival mode, and consolidating operations is a common response to tough economic times, he said.
In October, Texas-based BJ Services announced it was closing its Red Deer branch and consolidating its Alberta operations in Clairmont, in northern Alberta.
The number of jobs affected by the decision was not disclosed.