Cenovus Energy Inc. plans to cut 20% to 25% of its workforce after it acquires Husky Energy Inc., the companies said on Oct. 27, as Cenovus begins to slash costs in the Canadian oil patch's biggest merger in nearly four years.
The job losses could total about 2,150, based on the size of their workforces, including contractors. Most will be in Calgary, Alberta, Husky said in a statement.
Cenovus and Husky confirmed the job cuts after two sources told Reuters of the magnitude of the reductions.
Cenovus and Husky shares extended their gains after the Reuters report, rising as much as 8.5% and 7.9% respectively.
Pandemic lockdowns have hammered fuel demand globally and added to woes for Canada's oil sands producers, who have struggled since the previous price crash in 2014.
In the U.S., Chevron Corp. will lay off about 25% of Noble Energy's employees who joined the oil major after its $4.1 billion purchase this month, the company said on Oct. 27.
It was not clear when the Cenovus cuts would take effect.
"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," Husky spokeswoman Kim Guttormson said.
Cenovus spokesman Reg Curren also confirmed the cuts.
Guttormson said many details had yet to be determined as part of the integration planning process and the transaction has not yet closed.
The C$3.8 billion (US$2.9 billion) combination announced on Oct. 25 represents the largest Canadian oil and gas deal in nearly four years based on enterprise value, and may pressure peers to get bigger or sell.
Half of the C$1.2 billion in targeted savings will be achieved through job cuts and reductions in corporate overhead costs, including streamlined IT systems and procurement savings, the companies said.
Rival producer Suncor Energy Inc. this month said it would cut up to 15% of its workforce over the next year and a half, while Exxon Mobil Corp. was expected to cut jobs soon in the U.S. and Canada.
Recommended Reading
Oceaneering Won $200MM in Manufactured Products Contracts in Q4 2023
2024-02-05 - The revenues from Oceaneering International’s manufactured products contracts range in value from less than $10 million to greater than $100 million.
E&P Highlights: Feb. 5, 2024
2024-02-05 - Here’s a roundup of the latest E&P headlines, including an update on Enauta’s Atlanta Phase 1 project.
CNOOC’s Suizhong 36-1/Luda 5-2 Starts Production Offshore China
2024-02-05 - CNOOC plans 118 development wells in the shallow water project in the Bohai Sea — the largest secondary development and adjustment project offshore China.
TotalEnergies Starts Production at Akpo West Offshore Nigeria
2024-02-07 - Subsea tieback expected to add 14,000 bbl/d of condensate by mid-year, and up to 4 MMcm/d of gas by 2028.
US Drillers Add Oil, Gas Rigs for Third Time in Four Weeks
2024-02-09 - Despite this week's rig increase, Baker Hughes said the total count was still down 138 rigs, or 18%, below this time last year.