Husky Energy (TSE:HSE), Canada’s third-largest integrated oil producer, cut 1,000 jobs as production began at the C$3.2 billion Sunrise oil-sands project in northern Alberta, in which it owns a 50 percent working interest. Shares fell.
Izzy Huygen, a Fort McMurray, Alberta, representative of the Christian Labour Association of Canada, told Reuters yesterday that many of the workers had expected their jobs to last until summer but were informed of the layoffs on Wednesday morning.
“Guys were just notified this morning as they woke up in camp,” Huygen said. “They were supposed to be there until June, July and August. It was supposed to be a gradual decline through the summer, so this was unexpected.”
The workers were employed by Saipem SpA’s Canadian unit. However, Husky spokesman Mel Duvall confirmed that Saipem’s work has wrapped up at the site 60 kilometers northeast of Fort McMurray and any remaining work at the site will be handled by the company and other contractors.
Husky said yesterday that oil production had begun at the $3.2 billion Sunrise project, which is co-owned by BP Plc.
“Sunrise is the latest in a series of resilient, low sustaining capital projects to come online from our diverse portfolio,” chief executive officer Asim Ghosh said in a statement. “We are expecting more than 40 years of production from this reservoir with very low ongoing capital costs.”
Steam operations began in December 2014. Total production is expected to ramp up to full capacity of 60,000 barrels a day around the end of 2016.
Crude from Sunrise can be processed at a refinery in Toledo, Ohio, which Husky also jointly owns with BP.
The shares decreased 1.2 percent to C$25.42 at 2:42 p.m. in Toronto, stretching losses over the past six months to 22 percent.
Story by ProactiveInvestors
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