Petro-Canada Cuts 200 Jobs From Oil-Sands Unit On Proj Delay
* APRIL 15, 2009
OTTAWA (Dow Jones)--Petro-Canada (PCZ) is cutting some 200 jobs in its oil-sands unit as its Fort Hills project remains stalled amid weakened oil prices and the stuttering economy.
The layoffs, which will affect nearly a third of the department's employees, are "absolutely not at all connected" to the merger with Suncor Energy Inc. (SU) announced last month, said Petro-Canada spokeswoman Kelli Stevens.
"Unfortunately it's something we were having to contemplate with or without the merger," Stevens said. "It was a case of more people than we have work for, and we have had to do something about that."
Petro-Canada will be notifying the affected employees over the next couple of days, she added.
Most of the jobs are related to the stalled Fort Hills oil-sands project, which was delayed after estimated costs rocketed 50% as crude prices sank toward $30 a barrel at the end of last year. Analysts reckon the high-cost project will likely be pushed back even further as Suncor's more advanced projects take priority after the merger.
While the job cuts are spread out across the oil-sands unit, none of the operational staff at the 30,000-barrel-a-day MacKay River oil sands development will be affected, Stevens said.
She added that Petro-Canada is unlikely to announce further layoffs in its oil-sands unit.
-By Hyun Young Lee, Dow Jones Newswires
