Shell cuts up to 300 jobs at oilsands mine facility
Shell Canada told employees this week it will cut up to 10 per cent of 3,000 jobs at the Athabasca Oil Sands Project mining operations it manages north of Fort McMurray in an effort to improve efficiency.
Spokesman Cameron Yost confirmed the news Friday and said that employees displaced by the moves to be rolled out gradually over an undetermined time period will be able to reapply for positions elsewhere with Shell.
“It’s an adjustment to our oilsands operations organizational structure to ensure we have the right number of people in the right positions,” he said.
“The reason I say it’s not layoffs in the traditional sense of the word is that those affected by the adjustment will be considered for opportunities in other parts of Shell’s Canadian and global business.”
He said the actual number of layoffs will be “well below” 300 as cuts affect between five and 10 per cent of jobs.
Oilsands producers have emphasized cost-cutting in recent capital budget announcements and said they are hoping for reduced bills from service providers as activity wanes.
Thermal oilsands giant Cenovus Energy Inc. said last month it will cut its spending in 2015 to between $2.5 billion and $2.7 billion, down about 15 per cent from 2014, but will retain its 3,750 staff — although some jobs now in Calgary offices could be relocated to northern Alberta as expansions come on stream.
Earlier, chairman Murray Edwards said oilsands miner and thermal producer Canadian Natural Resources Ltd. had implemented a hiring freeze last summer to control costs but would not be laying off staff.
In a meeting with reporters last August, Shell Canada president Lorraine Mitchelmore said that under then new Royal Dutch Shell chief executive Ben van Beurden, business units around the globe were being ordered to cut costs and enhance productivity as they compete for limited capital investment dollars.
She said Shell Canada is not working toward any specific cost-cutting or productivity goals but said a warehousing efficiency initiative was an example of what was being done.
Yost said the oilsands reductions are related to the directive and don’t result from recent weakness in oil prices.
“Even if oil prices had remained stable, we would still be looking at all aspects of our business to ensure we are remaining competitive,” he said.
Shell is the operator and 60 per cent owner of the Athabasca Oil Sands Project, a joint venture with Chevron Canada Ltd. and Marathon Oil Canada Corp. each holding 20 per cent. The partnership includes the Scotford upgrader and the Quest carbon capture and storage project northeast of Edmonton.
The cuts come despite regulatory approval in 2013 of a plan to expand the AOSP’s Jackpine oilsands mine by 100,000 barrels per day.
Last month, an aboriginal challenge of the approval was rejected in Federal Court.