Tag: Husky Energy

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Alberta Economic Ft Mac

$800 Million in Spending Cuts Planned by Husky Energy

A recent announcement by Husky Energy shows that the company plans to implement $800 million in spending cuts in 2016 with capital spending targeted. In addition the stock dividend for the company will be suspended, at least in part because of the low oil prices currently seen. In December the company announced a capital spending plan that included between $2.9 billion and $3.1 billion, and these numbers have been revised downward since then. The latest announcement shows that the company plans on capital spending that totals between $2.1 billion and $2.3 billion instead. The company is hoping that Western Canada drilling deferment and a schedule adjustment for offshore drilling rig mobilization will help save money and cut costs down to manageable levels. If oil prices continue to drop on the global market even these steps may not be enough and further cuts in spending may be announced as the year goes on.

Husky Energy CEO Asim Ghosh weighed in on the spending cuts in a recent energy update report from the company. Ghosh explained “We continue to take decisive action in this period of persistent supply-demand imbalance. Our fundamental goal remains unchanged – the steps we are taking will see Husky emerge from this cycle as a more resilient and more profitable company.” The goal is to make the transition into lower priced oil easier and less disruptive. Ghosh also stated that “Within the updated capital plan, the transition into a low sustaining capital business continues unabated. Deferral of capital is in those areas that can be quickly switched on as commodity prices recover.”

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Economic Ft Mac

Job Cuts at Husky Energy May Just be a First Step, Asset Sales Being Considered as Well

job cuts, Husky Energy

In addition to the job cuts that have taken place at Husky Energy the company has announced that it is also considering the sale of assets in order to stay competitive and cut costs as much as possible. When the company posted the third quarter financial information the business had a loss, and so far 1,400 people have been laid off. 280 of these individuals were full time employees of Husky Energy, and roughly 1,120 of the positions eliminated involved contractors. The company also announced that additional cuts will be made and further layoffs will be coming. This is in addition to a salary freeze over the entire company workforce. A report released by Husky Energy included the statement that “Additional workforce adjustments will be undertaken as required in line with the business plan.”

Cutting jobs is not the only priority for Husky Energy right now. In addition to large job cuts the company is also thinking about selling off third party royalty interest that it currently holds, and the sale of assets that involve properties that have natural gas and oil potential. The report released by the company explains that “This would allow for a more focused capital program with a much larger proportion of capital deployed to higher return assets in a low oil price environment. Accelerating the rejuvenation of the Western Canada business with these initiatives will improve its resiliency through the various commodity cycles.” A $101 million dollar loss was posted by Husky Energy for their third quarter this year.

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Alberta Economic Ft Mac

Husky Energy Issues Contractor Layoffs as Sunrise Project Begins Production Phase

contractor layoffs, Husky Energy

Husky Energy recently issued 1,000 contractor layoffs as the Sunrise project started the production phase, and many contractors were caught by surprise when they received a layoff notice. All of the contractors involved were througj Saipem, an Italian contracting company. Many expected to continue on the project until summer, and felt they were blindsided by the company. Husky Energy spokesperson Mel Duvall sent an email that read in part “Construction at the Sunrise Energy Project is now largely complete and today we started production. Husky and its contractors will continue to oversee and manage the remaining commissioning work. Saipem’s scope has been wrapped up.The drop in oil had no impact. This is a function of construction. We announced first steam in December and said we expected first oil by end of March, so we’re tracking to that schedule.”

When Husky Energy was contacted about the contractor layoffs there was no response to a few questions that the media had about the layoffs. Husky Energy was asked whether the contractors were warned that the layoffs were coming, either by Saipem or by Husky, and which entity was responsible to provide the layoff warnings and notices. No response was provided for either question before the story hit the news. What is known is that Saipem did have some foreign workers on the Sunrise project who were among the contractors who were laid off. In 2013 there was also controversy over the Sunrise project, and almost 300 Canadian workers were let go while temporary foreign workers were brought in to take over.