By December 14, 2017 0 Comments Read More →

More Cenovus jobs lost as company looks to cut costs

Cenovus

Cenovus says it will continue construction work on the Christina Lake oil sands expansion project. Company photo.

Cenovus looking to cut additional 15 per cent of workforce

Cenovus Energy will cut hundreds of jobs and reduce 2018 capital spending under the leadership of Alex Pourbaix, the new chief executive of the Calgary-based, company.

Pourbaix says he’s looking to move more quickly to get the company’s financial house in order than preceding management had planned.

“We will build on the success of our divestiture program and work to exceed the goal, established in June of this year, of achieving $1 billion in cumulative capital, operating and general and administrative cost reductions with the aim of accelerating these reductions over the next two years instead of three,” Pourbaix said in a statement.

The job cuts will amount to a 15 per cent reduction in the company’s workforce, which translates to between 500 to 700 employees and contractors.  A recent staff count showed about 4,200 people worked for Cenovus prior to Thursday’s announcement.

After oil prices plummeted from over US$100/barrel in mid-2014, the company cut 1,500 jobs and 440 jobs were slashed in 2016.

The job cuts are welcomed by financial analysts.

Nick Lupick of AltaCorp Capital told 660 News that the company’s production target of 493,00 barrels of oil equivalent per day in 2018, up four per cent from 2017, is in line with previous forecasts.  This despite the capital spending budget of $1.6 billion well below consensus estimates of $2.1 billion.

Cenovus’ 2018 budget is $1.6 billion.

Cenovus will continue construction at its Christina Lake oilsands project, but will reduce spending in both oil sands and conventional gas and oil operations.

The company says it will spend $270 million next year on the Christina Lake expansion, which should begin producing in mid-2019.  Cenovus says the capital cost is expected to drop, coming in at about $675 million, one-fifth less than previously estimated.

Company spokesman Brett Harris says by deferring the work on growth projects, the company will be able to cut staff in those areas.

In total, the sales should amount to $3.7 billion.  The proceeds will help pay off the $17.7 billion buyout of most of the Canadian assets previously owned by Cenovus’s partner ConocoPhillips.
Harris said other cuts will come from efficiencies across the company.

Cenovus’ former CEO Brian Ferguson announced he would be leaving the company earlier in the year. The departure of executives Kieron McFadyen, president for upstream oil and gas, and Bob Pease, downstream president and director of US operations,  was also announced by the company on Thursday.

As well, Cenovus reports it will begin searching for a chief financial officer to take over for Ivor Ruste who will be retiring in April.

 

 

 

 

 

 

Posted in: Canada

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