8,700 jobs at risk if oil dips un­der US$50, study says

National Post (National Edition) - - FINANCIAL POST - Fi­nan­cial Post gmor­gan@na­tion­al­post.com Twit­ter.com/ge­of­frey­mor­gan

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.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.