COVID-19 and oil price rout spark Ov­in­tiv layoffs, En­bridge buy­outs

Calgary Herald - - CITY+REGION - AMANDA STEPHEN­SON astephen­son@post­media.com Twit­ter: @Aman­damsteph

En­ergy-sec­tor job losses are tak­ing place in Cal­gary this week as a re­sult of the on­go­ing fall­out from the COVID-19 pan­demic and the global oil-price shock.

Ov­in­tiv, the ex­plo­ration and pro­duc­tion com­pany for­merly known as En­cana — which moved its cor­po­rate domi­cile from Cal­gary to Den­ver ear­lier this year and changed its name — con­firmed layoffs Wed­nes­day, though spokes­woman Cindy Hassler said the num­ber of jobs lost won’t be made pub­lic un­til Thurs­day af­ter­noon.

Hassler said the layoffs are tak­ing place across all of the com­pany’s op­er­a­tions and lo­ca­tions, and af­fect cor­po­rate of­fice staff as well as field work­ers. Ov­in­tiv has cor­po­rate of­fices in Cal­gary, Den­ver and Wood­lands, Texas.

“We’re fac­ing a re­ally chal­leng­ing and un­prece­dented time in the his­tory of our in­dus­try,” Hassler said in an in­ter­view.

“The COVID-19 pan­demic has re­duced global de­mand and ob­vi­ously the oil-price col­lapse has cre­ated a need for a dy­namic re­sponse.”

In the first quar­ter of this year, Ov­in­tiv an­nounced plans to im­me­di­ately re­duce sec­ond-quar­ter 2020 cap­i­tal in­vest­ments by $300 mil­lion and full-year cash costs by $100 mil­lion. It also an­nounced it would cut its op­er­ated rigs from 23 to seven, leav­ing just three in the Per­mian, two in the Anadarko and two in the Mont­ney.

“Look­ing for­ward, we ex­pect our fu­ture ac­tiv­ity will also be lower than prior ex­pec­ta­tions,” Hassler said. “We felt like we had to take steps to right­size the or­ga­ni­za­tion based on our ex­pected fu­ture ac­tiv­ity lev­els.”

Also on Wed­nes­day, Cal­gary-based pipe­line com­pany En­bridge con­firmed that about 800 em­ploy­ees have agreed to take vol­un­tary buy­outs in the form of early re­tire­ment, sev­er­ance, ed­u­ca­tional or per­sonal leaves of ab­sence, or part-time work.

Spokes­woman Tra­cie Kenyon said in an email the buy­outs mean En­bridge won’t pur­sue com­pa­ny­wide layoffs at this time. Ex­ec­u­tives and man­agers at the com­pany have also agreed to take pay cuts of be­tween 10 and 15 per cent.

En­bridge re­ported a first-quar­ter loss of $1.4 bil­lion due to a num­ber of one-time, non-cash charges, in­clud­ing the write­down of the com­pany’s in­vest­ment in DCP Mid­stream, a joint ven­ture head­quar­tered in Den­ver.

The com­pany also com­mit­ted to re­duc­ing op­er­at­ing costs by $300 mil­lion, in­clud­ing re­duc­tions to se­nior man­age­ment and board of di­rec­tors’ com­pen­sa­tion, as well as the de­fer­ral of about $1 bil­lion of planned 2020 cap­i­tal spend­ing in light of COVID-19.

“En­bridge is a re­silient com­pany, but we are not im­mune to the un­prece­dented na­ture of the cur­rent cri­sis,” Kenyon said. “The dual chal­lenge of COVID-19 and global oil-price shock is im­pact­ing our com­pany, par­tic­u­larly with de­creased vol­umes in our liq­uids busi­ness.”

CRYS­TAL SCHICK FILES

Cal­gary-based En­bridge says about 800 staff are tak­ing vol­un­tary buy­outs and salaries will be re­duced.

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