Despite the cuts, Nexen said it's compliant with the commitments made to the federal government when it was bought by CNOOC Ltd.
CALGARY—Nexen Energy ULC, the Canadian company acquired by China’s CNOOC Ltd. more than two years ago, is cutting 400 jobs.
It says 340 of those will be in North America and the rest are with its U.K. North Sea operations. And of the North American job cuts, 300 are in Canada, where Nexen is active in the oilsands and in Western Canadian shale fields.
“In response to the recent industry downturn that has affected all companies in the energy sector, a decision was made to conduct a thorough review of our organization to ensure our long-term viability and sustainability,” CEO Fang Zhi said.
“While regrettable, these organizational changes are necessary to align the company with our reduced capital spending program. We take these decisions seriously, and all impacted employees have been treated fairly and with respect.”
Despite the cuts, Nexen said it’s compliant with the commitments it made to the federal government when CNOOC’s controversial $15.1-billion takeover of the company was approved.
“Industry Canada is reviewing the announcement and will ensure compliance with the Investment Canada Act,” ministry spokesman Michel Cimpaye said in an email.
U.S. benchmark crude prices settled at US$43.46 a barrel on Tuesday, a steep drop from highs above US$107 a barrel last June.
“Our long-term perspective continues to be fundamental to how we make decisions for our organization. As one of the world’s largest oil and gas producers, CNOOC Ltd. is focused on driving long-term stability for the company,” Fang said.
“CNOOC Ltd.’s rationale for acquiring Nexen remains the same—it was not made with a short-term view, but rather to acquire, and responsibly develop long-term, quality resources.”
Fang replaced Kevin Reinhart as Nexen’s CEO last April. At the time, the company said it wanted someone in charge with more operational and technical know-how.
Reinhart, who served as Nexen’s chief financial officer prior to the takeover, ushered the company through the contentious sale, which led Ottawa to rethink its approach to oilpatch takeovers by foreign state-owned firms.
In the same announcement Nexen said output in the oilsands has risen by 40 per cent since 2012. Its Long Lake project has had a history of operational problems and prior to the takeover, investors were frustrated as it struggled to meet production targets. In December of last year, the first phase of a new project called Kinosis came on stream.
The company also has shale lands in Western Canada and has been working on potentially exporting liquefied natural gas off Canada’s West Coast.
In addition to the U.K. North Sea, Nexen has offshore operations in the U.S. Gulf of Mexico and Trinidad and Tobago.