Nexen lays off 120 more Canadian employees as oil price slump persists

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Another 120 employees have been laid off by Nexen Energy ULC, a Calgary-based subsidiary of Chinese state-owned entity CNOOC Ltd.

“Given the current economic reality, we have made the difficult decision to reduce our workforce,” said Nexen spokeswoman Brittney Price in an e-mail.

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“These changes impact approximately 120 Canadian employees. We take these decisions seriously, and all impacted employees have been treated fairly and with respect.”

She didn’t say where the affected employees have been working. A year ago, the company laid off 300 people at its headquarters in Calgary, 40 from Fort McMurray and in the United States, and 60 in the United Kingdom.

In a strategy announcement Jan. 19, Beijing-based CNOOC announced it would focus on cutting costs in 2016 to deal with low commodity prices around the world.

“Faced with an increasingly complicated operating environment in 2016, the company will fully utilize market mechanisms and combine innovations in technology and management in order to reduce costs and enhance efficiency,” said chief executive Li Fanrong in a news release.

“In addition, the company will ensure an appropriate balance between short-term returns and long-term growth to promote a steady and healthy development.”

CNOOC said its production target for 2016 was set at 470 to 485 million barrels of oil equivalent, down from 495 million realized last year. It stated about two-thirds would be produced in China.

Twelve months ago, Nexen announced it would cut the 400 employees — in addition to unspecified reductions of contractors — to match head count to a lower level of development spending.

The downsizing was the first major corporate reorganization at Nexen since it was acquired in 2012 by CNOOC for $15.1-billion.

The deal was approved by the Harper government but led to limits on national oil company takeovers of Canadian energy companies and particularly oilsands projects.

Last summer, five million litres of emulsion — a mixture of bitumen, sand and water — spilled from a pipeline into the muskeg at Nexen’s Long Lake integrated thermal oilsands project southeast of Fort Mc-Murray, resulting in production outages.

In January, two workers were killed in an explosion at the same facility.

Oil and gas associations estimate that about 100,000 workers directly or indirectly employed in the oilpatch have lost their jobs in the 20 months or so since West Texas Intermediate oil began falling from a peak of over US$100 per barrel.

dhelaing@calgaryherald.com

Twitter.com/HealingSlowly