Canada's Oil Industry Faces More Job Cuts

Boom time is categorically over for Canada’s oil industry, with the next round of layoffs set to continue throughout 2016. The nation has endured almost two years of plummeting oil prices, with at least 40,000 job cuts materialising as an after-shock. Operations are alarmingly bloated, and companies are rapidly shaving their workforces in response.

Cenovus Energy Inc. and Murphy Oil Corp announced a new line-up of redundancies in early April, with major players such as Suncor Energy Inc. and Encana Corp also confirming that 2016 will bring more ongoing cuts. By the end of the year analysts forecast that the downsizings will amount to thousands of job losses, and billions of dollars in savings for the cash strapped companies.

Companies slash staff to stay afloat

While the outlook is adverse for Canadian employees, oil producers maintain that the cuts are necessary. Canada is home to some of the most expensive oil-producing regions on the planet, with northern Alberta break-even costs clocking in at the highest in the world. This means companies can no longer afford to maintain the staffing levels they enjoyed when oil went for around US$90 a barrel. As oil and gas is the core of Alberta’s economy, the mass layoffs have had an adverse effect on the province’s overall unemployment statistics. In February joblessness sat at 7.9%, a figure that trumped the national average for the first time in 28 years.  

An ominous year ahead for oil and gas employees

Todd Hirsch, chief economist at Calgary’s ATB Financial warns that the job cuts will likely continue for six months, as companies desperately attempt to trim swollen staffing levels.

“Many of these companies are getting employment levels down to the bare bones and over the spring and summer there will be more layoffs,” he predicts.

Canada tightens its belt

All up, Canada’s 27 major oil producers are set to slash spending by 32% this year, according to a recent set of estimates compiled by Bloomberg. With cash flows rapidly collapsing, ARC Financial Corp vice president Jackie Forrest asserts that ruthless cost cutting is on the cards, and “Unfortunately headcount is one of the first approaches they take.”

So what’s next for the Great White North? Lynn Patterson, deputy governor of the Bank of Canada predicts that it will take at least 24 months for the nation to attune itself to the oil price crash, which will drag down consumer spending, create cash strapped households, devastate ancillary workers and trigger a dire unemployment insurance situation.

While Canada’s oil and gas industry may be in freefall, safety standards remain meticulous. ‘Improved Resolution of Benzene (and Other Aromatics) and Oxygenates in Reformulated Gasoline Using a One-Column Approach’ analyses the strict carcinogenic regulations in place, and the analytical challenges that go hand in hand with the complex composition of gasoline.