En­bridge re­duces pay, de­creases staff by 800

Calgary Herald - - FINANCIAL POST - GE­OF­FREY MOR­GAN

CAL­GARY North Amer­ica’s largest pipe­line com­pany En­bridge Inc. is cut­ting non-union salaries and of­fer­ing em­ploy­ees early re­tire­ment and sev­er­ance pack­ages in an ef­fort to cut costs.

En­bridge said in an email Wed­nes­day that roughly 800 em­ploy­ees — or about seven per cent of the com­pany’s work­force — have ac­cepted vol­un­tary early re­tire­ment pack­ages, sev­er­ance, ed­u­ca­tional or per­sonal leaves of ab­sence or part-time work.

At the end of last year, the com­pany em­ployed 11,300 peo­ple, in­clud­ing 7,800 in Canada and 3,500 in the United States.

En­bridge spokesper­son Jesse Semko said the com­pany would not “need to pur­sue com­pany-wide layoffs at this time” as a re­sult of the cost-cut­ting mea­sures con­firmed Wed­nes­day.

The com­pany is re­duc­ing chief ex­ec­u­tive Al Monaco’s salary by 15 per cent, di­rec­tors’ pay by 15 per cent and ex­ec­u­tive vice-pres­i­dents’ salaries by 10 per cent.

Com­pany dis­clo­sures show Monaco’s com­pen­sa­tion in 2019 to­talled $14.7 mil­lion, in­clud­ing the value of eq­uity com­pen­sa­tion.

The com­pany is also re­duc­ing base pay across its non-union work­force. Dis­clo­sures from En­bridge show that at the end of 2019, 1,700 En­bridge em­ploy­ees, or 15 per cent of its staff, were un­der col­lec­tive bar­gain­ing agree­ments but they were set to ex­pire at the end of 2020.

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

En­bridge op­er­ates the largest oil pipe­line net­work ex­port­ing Cana­dian crude to the U.S. Mid­west and to Cen­tral Canada. In re­cent years, as Cana­dian oil pro­duc­tion has surged be­yond the ca­pac­ity of the ex­ist­ing oil ex­port pipe­lines in Canada, the En­bridge Main­line sys­tem has had to ra­tion space, forc­ing pro­duc­ers with­out ac­cess to pipe­lines to move their oil on train cars.

The In­ter­na­tional En­ergy Agency said in a re­port this week that Cana­dian oil pro­duc­tion fell by 530,000 bar­rels of oil per day to reach 5.1 mil­lion bpd in April as com­pa­nies shut in un­eco­nomic pro­duc­tion to sur­vive the dra­matic col­lapse in crude mar­kets. As a re­sult, En­bridge’s Main­line pipe­line net­work is no longer in ap­por­tion­ment

— mean­ing there is enough space on the sys­tem to move the oil be­ing pro­duced in Canada.

Across the border, Amer­i­can oil and gas com­pa­nies are also look­ing to cut their head­counts amid a se­vere price de­cline.

Ov­in­tiv Inc., the oil and gas pro­ducer that moved its head­quar­ters out of Cal­gary ear­lier this year, is lay­ing off staff across North Amer­ica as it re­duces drilling ac­tiv­ity.

The layoffs are com­ing roughly equally from the com­pany’s of­fices in Cal­gary, Den­ver and Texas, as well as from field staff, said Cindy Hassler, a spokes­woman for Ov­in­tiv. Hassler de­clined to im­me­di­ately pro­vide a num­ber of how many jobs were cut.

Fi­nan­cial Post

With files from Bloomberg

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