Suncor postpones projects, Syncrude delays spring break-up maintenance indefinitely, Precision Drilling cuts CEO salary, plans layoffs, pay cuts across the board
Dropping oil prices and the COVID-19 pandemic is forcing Suncor to postpone some projects.
Building Trades of Alberta said the efforts are being done to minimize the number of workers at Base Plant site due to the pandemic.
“The work to safely stop these projects will begin immediately,” said the Buiding Trades of Alberta in a statement March 23.
Suncor released a corporate update on March 23, including revised 2020 corporate guidance for capital, operating costs and production outlook, reflecting the significant decline in the crude oil price and uncertainty surrounding the economic impact of COVID-19.
“The simultaneous supply and demand shocks are having a significant impact on the global oil industry,” said Mark Little, president and chief executive officer of Suncor.
“We are adjusting our spending and operational plans to be prepared in the event the current business environment persists for an extended period of time. Our business model and financial strategy are designed to withstand volatile environments.”
During spring break-up oilsands facilities shut down for scheduled maintenance. Syncrude was expected to hire about 850 people for this maintenance work but that has been postponed indefinitely.
Precision Drilling, in a statement today, said that in response to the expected reduction in demand as customers reduce spending due to lower than anticipated commodity prices, Precision is reducing its 2020 capital expenditure plan to $48 million, down about 50 per cent from its previously set plan of $95 million. Further adjustments may be considered depending on activity levels realized as the year progresses.
Precision also said they are reducing the CEO’s salary by 20 per cent and the board of director’s compensation by 20 per cent. In addition, the executive officer salary will see a 10 per cent cut. There will also be staff and salary reductions across the board.
“We expect these fixed cost reduction measures will reduce annualized fixed costs by over 30 per cnet, including up to a $30 million reduction in G&A expense,” said Precision Drilling in their statement.
Last week the Conference Board of Canada, in their spring outlook report, said the impact to Alberta’s energy industry due to COVID-19 and the oil price war between Saudi Arabia and Russia could put Canada on the brink of recession.
“After slowing to end the year, economic growth has been weak in the first quarter and is expected to contract in the second quarter to 2.7 per cent,” said the Conference Board’s spring outlook report.
-George Brownwell/Alberta Press
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