CALGARY – A tough week in the Canadian oil patch continued Wednesday, as ConocoPhillips Co. became the latest in a string of oil companies to lay off staff. The Houston-based energy major trimmed its Canadian headcount by 7% or about 200 employees.
Company spokeswoman Kristen Ashcroft confirmed Wednesday the ConocoPhillips Canada employees would be let go by the end of March. “It’s related to the challenging economic environment,” Ms. Ashcroft said. “We had to make some difficult decisions.”
ConocoPhillips’ move follows cuts at Talisman Energy Inc. and Nexen Energy ULC, both of which announced hundreds of layoffs on Tuesday in response to collapsed oil prices.
Oil prices hit another six-year-low on Wednesday morning, as the West Texas Intermediate benchmark price fell to US$42.24 per barrel before finishing up 2.8% on the day, at US$44.66.
Major oil producers have been laying off staff as a result of the slide.
Alan Kearns, president and founder of Calgary-based CareerJoy, said his firm had been approached by a number of energy-sector companies looking for assistance in letting staff go.
“This entire year will be like this,” Mr. Kearns said in an interview. He said if oil and gas production companies are cutting jobs, then the engineering firms, construction and oilfield services companies that support the producers are likely to follow suit.
Nexen, a subsidiary of China’s state-owned CNOOC Ltd., announced 340 people in Canada and 60 in the United Kingdom would lose their jobs. Talisman, which recently sold itself to Spain’s Repsol SA, said it was cutting its Canadian headcount by between 150 and 200 people.
ConocoPhillips employs 2,800 people in Canada and is partnered with Calgary-based Cenovus Energy Inc. on its Christina Lake and Foster Creek steam-based oilsands projects. The two companies are also joint-venture partners in two refineries in the United States.
Cenovus announced Feb. 12 it would reduce its headcount by 15% and that the majority of those job cuts would be for the company’s sizable contract workforce. Company spokesperson Brett Harris said by phone that the majority of those layoffs have already happened, and the company isn’t planning further cuts.
BMO Capital Markets analyst Iain Reid said in a Jan. 29 research note following the release of ConocoPhillips year-end results that the company’s Canadian earnings numbers missed forecasts by 17%. Mr. Reid noted that ConocoPhillips had reduced its planned capital spending on its Surmont oilsands project, a joint-venture with Paris-based Total SA, for 2015 and 2016.
Ms. Ashcroft said the company was cutting staff across the board and the cuts were not related to the company’s oilsands spending this year and next.