Cenovus Energy Inc. plans to cut up to a quarter of its work force after it acquires Husky Energy Inc., in another major blow to Alberta’s oil patch.
The job losses could total around 2,150 positions, with the majority expected to be lost in Calgary. There were no details available on the timing of the cuts. Cenovus said details of the transition plan are still being worked out as the oil giants prepare to become one, likely in the first quarter of 2021.
“As with any merger of this type, there will be overlap and there will be some difficult decisions as we work to create a combined organization best positioned for the future,” Cenovus spokesperson Sonja Franklin told The Globe and Mail in an e-mail.
The move is yet another hit to a sector that has already shed thousands of jobs. Suncor Energy Inc. has announced plans to cut up to 2,000 workers over the next 18 months and the Canadian Association of Petroleum Producers estimates around 28,000 oil production jobs have been lost in 2020, thanks to the global drop in demand, and ensuing crash in oil prices, during the pandemic.
The province’s oil and gas sector was shedding jobs even before COVID-19. Companies such as Husky Energy Inc. and Perpetual Energy Inc. announced cuts last year, not long after the United Conservative government slashed corporate taxes in what it billed as a job creation exercise.
Cenovus revealed plans to acquire Husky and create Canada’s fourth-largest energy company on Sunday, as the firm copes with chronically low crude prices and investor pessimism about the industry’s fortunes. The $3.8-billion deal will offer a 21-per-cent premium on Husky’s recent share prices; Cenovus will also take on more than $6-billion in Husky debt.
Alberta Jobs, Economy and Innovation Minister Doug Schweitzer said Tuesday the global challenges facing the oil sector highlight the importance of redoubling his government’s efforts to diversify the province.
“My heart goes out to the workers that have been impacted in this,” he said.
With jobs in the oil sector continuing to evaporate, Mr. Schweitzer said the government is preparing a series of measures to help workers retrain. If a geologist wants to pivot to concentrate on data science, for example, the province wants to make sure “it’s a quick turnaround time to reposition them to a new job,” he said.
But that doesn’t mean Alberta is moving away from energy as it attempts to diversify.
“It’s still going to be a huge part of the foundation of our economy,” Mr. Schweitzer said.
Oil and gas has brought “immense” prosperity to Alberta and still employs thousands of people, he said, and the province intends to build on its “traditional economy” by leveraging opportunities in areas such as hydrogen production, carbon capture and storage, and methane-reduction measures.
To underscore his government’s plans, Mr. Schweitzer pointed to his Tuesday announcement that $50-million of funds gathered through Alberta’s carbon tax on large emitters will be used to partly fund projects to help improve industrial energy efficiency.
He said the cash would help Alberta become a stronger competitor in clean energy technologies, and reduce greenhouse gas emissions over the short and long term.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.