Enbridge chops 530 jobs, mostly in Canada

 

  • 20 Oct 2016
  • Calgary Herald
  • JESSE SNYDER
  • Financial Post

Enbridge chops 530 jobs, mostly in Canada

Company says cuts related to ‘growth strategy’ and not Spectra merger

Canada’s largest pipeline operator Enbridge Inc. announced Wednesday it plans to cut more than 500 positions at the company, further diminishing the oil and gas sector’s already-reduced workforce.

Calgary-based Enbridge, in an emailed statement, said it “took the difficult step today of reducing our workforce.”

The layoffs account for about five per cent of the roughly 11,000 people that work for the company.

Enbridge said the cuts are not related to its recently proposed $37-billion merger with Houstonbased Spectra Energy Corp. announced in September. A spokesperson said the layoffs were instead part of a review earlier this year aimed at allowing the company to “achieve our strategy of growth and diversification.”

The company slashed a total of 530 positions from its workforce, 370 of which are from its Canadian division.

The other 160 are U.S. positions, the company said.

Wednesday’s cut is similar to an announcement the company made one year ago, when it also removed 500 positions from its workforce.

The cuts are the latest in a wave of retrenchment in the hard-hit Canadian oil and gas sector, which has suffered lower oil prices since the second half of 2014.

According to various estimates, Alberta’s oil and gas sector has lost as many as 44,000 jobs since prices began their descent. Most of those cuts took place in 2015, when the oil rout was at its deepest.

Pipeline operators such as Enbridge are not exposed to low oil prices as directly as producers are, and therefore have not cut their workforces on the same scale as their peers.

However, midstream companies have still felt the knock-on effects of low prices, which has helped spur a recent rise in consolidation among operators.

Enbridge rival TransCanada Corp. in July closed its US$13billion acquisition of Columbia Pipeline Group Inc., a Houstonbased company with a network of natural gas pipelines in the U.S. and Mexico.

Enbridge later announced its own plans for a mega-merger, buying up pipeline giant Spectra. The purchase put Enbridge firmly in place as North America’s largest energy infrastructure firm, with a broad portfolio of assets including oil and gas pipelines, storage facilities and power generation plants.

The merger still has to be approved by antitrust regulatory bodies, but could be completed in the first quarter of 2017.

Despite its relative stability, Enbridge’s balance sheet has suffered amid low oil prices. The company’s net earnings for the three months ended June 30 were $189 million, compared with $620 million the year prior. Its revenues were $7.94 billion over the three-month period, compared with $8.63 billion one year earlier.

Shares of Enbridge Inc. rose 63 cents, or about 1.1 per cent, to $58.79 on 1.4 million shares Wednesday.

 

 

About prosperitysaskatchewan

Consultant on Saskatchewan's natural resources.

Posted on October 20, 2016, in economic impact, oil, political. Bookmark the permalink. Leave a comment.

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