8,700 jobs at risk if oil dips under US$50, study says
CALGARY • Despite two years of layoffs and heavy cost cutting, jobs in the Canadian energy sector continue to be at the mercy of price swings, says a new report that warns 8,700 more jobs could be lost if prices drop below US$50 per barrel.
Enform, a Calgarybased firm that researches labour market trends in the Canadian energy industry, released a study Thursday showing the oilpatch lost 52,500 direct jobs between 2015 and 2016 “along with thousands of indirect jobs.”
The study also shows tentative plans by oil and gas companies to rehire laid-off workers could be delayed until 2018 and “further restructuring will occur,” leading to 8,700 jobs losses if West Texas Intermediate oil prices fall well below US$50 per barrel.
The WTI benchmark price rose one per cent Thursday morning to US$50.22 per barrel.
“Right now, we’re in the middle of the road between two scenarios,” said Carol Howes, Enform’s vice-president of communications. From current levels, she said, layoffs could continue this year if prices fall or the industry would begin rehiring a modest number of employees if prices stabilize and rise.
The organization estimates direct job losses in 2015 and 2016 equated to a 25 per cent decrease in the total number of people working directly in the oilpatch — and the industry is not expected to recover all of those jobs, even if oil prices rebound.
“While the industry is on a path to some job recovery, even with some retirements the industry is not expected to fully regain all of the jobs it lost in the last two years,” Cameron MacGillvray, Enform’s president and CEO, said in a release.
The study also shows that if oil prices stabilize or rise, “a modest five-year job recovery will begin in 2017,” Howes said. Enform puts the total number of new direct jobs over the next five years at 17,000 people, which is just a third of the jobs lost.
Consolidation in the energy industry, however, continues to threaten jobs. Enbridge Inc. announced this month that it would layoff 1,000 people following its $37-billion merger with Spectra Energy Corp.
Howes said the study does not include staffing projections from recent merger announcements, but does include forecasts of staffing levels from general merger trends.
Similarly, some employees may lose their jobs following Canadian Natural Resources Ltd.’s $12.7 billion acquisition of Shell Canada’s oilsands assets, though neither company has said how many people could be affected.
Cenovus Energy Inc. announced this week a $17.7 billion acquisition to buy assets from ConocoPhillips and that it would be welcoming some of those employees into its company. Cenvous did not say whether it would reduce staff once the deal closes and it adds employees from ConocoPhillips.
Nexen pipes are inspected at Dilly Creek in the Horn River Basin. Calgary-based research firm Enform says the oilpatch lost 52,500 direct jobs between 2015 and 2016.