Cen­ovus to cut 300 to 400 more jobs

The Guardian (Charlottetown) - - CANADA -

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 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.

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