Oil companies that play an important role in the economy of Wood Buffalo and Fort MacMurray have recently announced spending and job cuts due to economics, and these cuts amount to hundreds of millions of dollars. The cuts were announced soon after the second quarter financial reports were prepared and released by the oil companies. Cenovus Energy, Royal Dutch Shell, and Suncor Energy all announced cutting hundreds of jobs and slashing hundreds of millions of dollars in spending. This is the second time in 2015 that Suncor Energy has cut spending plans. Since the beginning of the year the company has cut out more than 1,200 positions, and these were filled by employees or subcontractors. Another round of cuts is understandably causing stress for those who work in the industry and rely on these companies for a paycheck.
The economics of the current spending must be addressed by the oil companies. On the other hand cutting costs and scaling back expenses too far could cost the companies and te industry greatly if oil prices suddenly jump up again because rapid production and processing expansion may not be possible at that time due to previous cutbacks. In order to stay profitable the oil companies must constantly watch for any signs of market movement either way, and try to accurately predict what the future holds. The quarterly report for one company simply stated “These positions are no longer required because of a decrease in work due to the continued low oil price environment.”