Syncrude layoffs

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Hundreds laid off, thousands of jobs delayed in Alberta oilsands

Floundering oil prices and the shutdown of much of the economy have caused oilsands companies to lay off workers and delay projects. 

Jay Bueckert, regional director for the Christian Labour Association of Canada (CLAC) in Fort McMurray, said he takes dozens of calls every day from people who are desperate for work. 

"This is really having an impact on a lot of people's lives," Bueckert said.

Within CLAC alone, at least 500 oilsands workers have been laid off as companies scale back operations during the COVID-19 pandemic.

Suncor and Syncrude are reducing their onsite workers to essential employees only and have delayed projects to try and minimize the number of employees onsite. 

Because employees under CLAC are contractors, they're not paid during the layoffs, Bueckert said. 

"Unfortunately, when it's a construction project, you have to actually be there doing the construction to get paid for it."

Oilsands facilities often undergo shutdown work for scheduled maintenance that can only be done while certain equipment is not in use. Companies bring in extra workers to get the work done quickly.

Syncrude's shutdown maintenance work, which had been expected to create 850 union jobs, has been indefinitely postponed. 

"For a lot of these folks, they were just getting back to work doing some of these projects," Bueckert said. "I think it is quite devastating for a few." 

The oil industry has been doubly hammered by COVID-19 and the steep decrease in oil prices, leading to "a major impact on cash flow for these companies," Bueckert said.

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Terry Parker, executive director of Canada's Building Trades Unions, said many workers expecting to work on oilsands shutdown projects won't be needed soon. 

He commended the companies for scaling back to keep workers safe but noted it has created an "economic disaster" for them.

There's a lot less people working and families are hurting​​.- Frank Farberman, co-owner of Direct Workwear

He said across Alberta, workers are looking at about 10,000 jobs being postponed as shutdown work gets delayed. 

People have been waiting for about five months for the jobs to come up, he said. 

"We want to make sure our members are gaining a paycheque, but we also want to make sure things are done right and our members go home safely to their family and friends at the end of their shift," Parker said.

He said some of the shutdown work can be pushed off for about a year, but some maintenance is required to keep the plants functioning, and that's what companies are assessing right now. 

People in Fort McMurray are experiencing a ripple effect from the decrease in oilsands work. 

Frank Farberman, who owns Direct Workwear in Fort McMurray with his wife, sells safety gear for oilsands workers. Farberman said they've had to lay off some staff. 

"There's a lot less people working and families are hurting,"Farberman said. "This town has just been put through too much."

Farberman said his family-run business will try to help people if they can.


Suncor Energy, Inc. SU announced that it reached a tentative agreement with other owners of the joint venture ­­­— Syncrude — to take up daily operations by late 2021.However, Suncor is yet to receive formal approval from the co-owners.

The Syncrude project was initiated by a group of partners, with Suncor holding the majority stake of 58.74%. The remaining stakeholders include Imperial Oil Limited IMO, with 25% working interest, while Sinopec SNP and CNOOC Oil Sands Canada CEO own 9% and 7% stake, respectively.

Syncrude is one of the first oil sand mining joint venture and the biggest single-source producer of crude oil in Canada, which is stationed in the Athabasca oil sands near Fort McMurray, about 440 kilometers northeast of Edmonton. Suncor will start operating the mine as well as the connected upgrader, with a capacity of 350,000 barrels of oil per day by the end of 2021. The company’s other oil sand ventures include the Fort Hills project, its Base Plant and other steam-based operations.

The Calgary-based company intends to reduce its operating costs to C$30 (US $23) per barrel of oil and achieve 90% utilization. Further, the move is expected to acquire a yearly saving worth C$300 million and make Syncrude yet more regionally and globally competitive. Per Mark Little, president/CEO at Suncor, this might lead to employee layoffs on the administrative side of the business as it moves through the transition process. Despite the job cuts, Syncrude and the joint-venture participants are likely to achieve major approaches to make this business stronger.

Notably, Suncor’s operatorship marks the evolution of the oil sand mining industry from a risky, high-valued venture to a more powerful and predictable operation. The energy company commits toward successful oil sand development and provide the energy Canada needs.

Company Profile & Price Performance

Headquartered in Calgary, AB, Suncor is a premier integrated energy company.

The company currently carries a Zacks Rank #3 (Hold). Its shares have underperformed the industry in the past three months. Suncor’s shares have gained 6.7% compared to 8.4% growth of the composite stocks belonging to the industry.



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Suncor CEO says there will be layoffs with Syncrude agreement

The chief executive of Suncor Energy Inc. says the company’s agreement to begin operating the Syncrude project next year will cost some people their jobs.

“There will be layoffs,” Little said in an interview Tuesday without specifying the number of anticipated reductions. “It’s a heartache when we have a downsizing related to this.”

“We’re still just in the process now of starting to work out the details associated with it. But there’s thousands of people that work for Syncrude and most of them are operating the facilities – and all that is unchanged. It’s really the administrative side.”

Little said some of Syncrude and Suncor’s departments such as procurement, information technology, and human resource will be consolidated.

“We’ll put those teams together and it’ll be stronger,” he said.

Little said the agreement – which would see Suncor begin operating the Syncrude project by the end of 2021 – could yield $300 million a year in savings.

Suncor owns a 58.74-per-cent stake in the Syncrude Joint Venture, increased from 12 per cent in 2016.

Other Syncrude stakeholders including Imperial Oil Resources Ltd., CNOOC Oil Sands Canada and Sinopec Oil Sands Partnership must also formally approve the agreement.

“There is a downsizing, which is the challenge with [the deal],” Little said. “The good thing is that we become much stronger and the performance of this asset will improve.”

With files from The Canadian Press


Imperial Oil to Lay Off 200 Staff, 450 Contractors as Suncor Takes Over Management of Syncrude Tar Sands/Oil Sands Mine

Calgary-based Imperial Oil announced last week that it is laying off 200 staff, just a day after the ExxonMobil subsidiary agreed to hand over business management of the mammoth Syncrude Canada tar sands/oil sands mine and upgrader to project partner Suncor Energy.

“The oilsands, refining, and energy retailing company, which has been reluctant to cut staff during the current and previous industry downturns, also confirmed Wednesday it has reduced the number of contractors it employs by about 450 since the start of the year,” The Canadian Press reports. “Imperial is 69.6% owned by U.S. [fossil] energy giant ExxonMobil Corp., which said in October it would cut its global work force by about 15%, equating to about 14,000 jobs.”

Imperial spokesperson Lisa Schmidt said Imperial couldn’t yet say where the job axe would fall. “There has been study work under way globally to assess the potential for further cost reductions from structural efficiencies and lower activity levels across our business,” she told CP in an email. “This work includes an evaluation of work force requirements around the world on a country-by-country basis, including in Canada. Imperial has been engaged on this work with ExxonMobil.”

A day earlier, Suncor and Imperial announced the end of a 14-year contract that had Imperial seconding staff to the Syncrude operation. The process is expected to be complete by the end of next year.

“There will be layoffs,” said Suncor President and CEO Mark Little. “It’s a heartache when we have a downsizing related to this,” and “we’re still just in the process now of starting to work out the details associated with it. But there’s thousands of people that work for Syncrude and most of them are operating the facilities—and all that is unchanged. It’s really the administrative side.”

Little said he expected to save C$300 million per year by consolidating Syncrude and Suncor operations in procurement, IT, and human resources.

“We’ll put those teams together and it’ll be stronger,” he said.

The Globe and Mail casts the takeover, the first major change in Syncrude’s governance in 50 years, as the end of a process that began in 2009 when Suncor acquired a 12% stake in the operation. That increased to 49% in 2016, when Suncor bought out Canadian Natural Resources Ltd.’s share for $6.6 billion. A couple of months later, Suncor purchased another 5% from a U.S. fossil.

“The owners have worked for a couple of years to try and figure out how we make Syncrude the most globally competitive business that it could possibly be, and the conclusion is to have Suncor operate it,” Little told the Globe.

“We can’t continue to duplicate work. We need to find better ways to move forward,” he added. “We need to be able to figure out how to generate more cash from these businesses, and working together and taking this step makes a lot of sense.”


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Premier Kenney speaks out on Suncor layoffs

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