Royal Dutch Shell PLC said Friday it plans to cut jobs at its Canadian oil-sands operations, becoming the first major energy company to shed workers in Canada’s oil patch amid a recent swoon in global crude oil prices.
Shell, which produces 250,000 barrels of oil a day from its oil-sands mines, will trim about 5% to 10% of its 3,000 workers, some of whom will be reassigned to other jobs, said company spokesman Cameron Yost.
“We’re continuing to review our business to make sure that we remain competitive,” Mr. Yost said. “When prices are low the importance of that is underlined,” he said.
The president of Shell Canada, Lorraine Mitchelmore, said in August that the company’s oil-sands business met internal yardsticks for profitability when Brent crude trades above $70 per barrel. Prices for Brent, the global oil benchmark, have spiraled lower in recent weeks, falling below $50 a barrel this week.
Shell owns a 60% stake in its core oil sands operations with Chevron Corp. , and Marathon Oil Corp. splitting the remainder. These consist of two surface mines, known as Jackpine and Muskeg River, in Alberta.
Last February, Shell pushed back the development timeline for an oil-sands mine at a site called Pierre River, but has been pursuing other projects such as an expansion of its Jackpine mine and horizontally drilled wells elsewhere in northern Alberta at Carmon Creek and Peace River.
By Chester Dawson
Source: Wall Street Journal
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