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CALGARY – The Canadian subsidiary of Chinese state-owned oil giant China National Offshore Oil Corporation Ltd., or CNOOC, has laid off 100 people from its Calgary offices in a move it says is vital to keep it “competitive” against rival companies.
“As with all companies in our industry, we must take actions to remain competitive amongst our peers and ensure our long-term economic viability,” CNOOC International spokesperson Brittney Price said in an email, confirming the number of laid off staff.
“We take all decisions on our organizational structure very seriously, and as is our practice, we will treat all affected staff fairly and with respect,” Price said.
CNOOC purchased Calgary-based Nexen Inc. for $15.1 billion in 2012 and made a series of commitments to the federal government to win approvals for the transaction. Among its seven promises was the pledged to “establish Calgary as the head office of its North and Central American operations,” and to “retain Nexen’s current management team and employees” and list its shares on the Toronto Stock Exchange.
Following the transaction, CNOOC replaced senior Canadian staff with Chinese nationals, and has listed only a small amount of its own shares on the TSX and has shed employees.
Price says CNOOC’s staff cuts have not impacted the Calgary office’s status.
“CNOOC International’s Calgary office continues to be the headquarters for our North American business. Throughout these changes, the safety of our employees, contractors and the communities where we operate will remain our top priority,” Price said in an email.
The company’s workforce, which once stood at just over 3,200, has shrunk considerably since the acquisition.
Sources confirmed to the Financial Post the company’s new lease downtown is significantly smaller than its previous one.
CNOOC occupied approximately 620,000 square feet of office space in the Nexen building in downtown Calgary but is downsizing to approximately 300,000 square feet across eight floors at its new location at 58-storey The Bow.
The latest cuts adds to a long list of retrenchments as international oil companies sour on Canadian oil and gas resources. CNOOC also abandoned its $20-billion Aurora LNG project in 2017 that would have exported Canadian natural gas from Prince Rupert, B.C.
In 2015, the company cut 400 staff primarily in Canada from its operations as it scaled back spending following a dramatic collapse in oil prices.
A year later, in March 2016, the company announced it was laying off another 120 staff because of economic difficulties.
A few months later, in July 2016, the company let go of another 350 staff between its Calgary office and those working at the Long Lake oilsands operation, following an explosion that damaged its oilsands upgrader and killed two people. The oilsands upgrader has not been repaired.
GMP FirstEnergy’s Calgary-based analyst Mike Dunn said CNOOC had been spending money to expand production from its Long Lake steam-based oilsands plant despite the upgrader being shut down. CNOOC had also recently completed an offshore project in the Gulf of Mexico with joint-venture partner Royal Dutch Shell Plc, Dunn said.
The Canadian oil and gas industry has been laying off staff to cope with lower oil prices and a lack of pipeline access to U.S. and global markets over the past five years.
A release from PetroLMI, the labour-force information arm of Energy Safety Canada, showed that 3,000 direct positions were lost in Canada’s oil and gas industry in April, with 40 per cent of those job losses in Alberta.
Since 2014, when oil prices collapsed from over US$100 per barrel, there have been tens of thousands of direct job losses in the energy sector and an estimated 100,000 direct and indirect jobs lost.
According to PetroLMI, 228,996 workers were directly employed in the oil and gas sector at its peak in Aug. 2014, but that number has declined to 194,536 positions as of April 2019.
• Email: [email protected] | Twitter: geoffreymorgan
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