Husky Energy Inc. has laid off an undisclosed number of employees to cut costs while oil prices hover near a 12-year low with little prospect for a short-term recovery.
Husky, which is controlled by Hong Kong billionaire Li Ka-shing, said the new cuts are needed to make sure the company remains resilient through the current downturn and beyond.
Last year, it disclosed it reduced its work force by about 1,400 people worldwide amid a rash of layoffs in Canada's energy sector.
"The staff reductions were across the company's operations," spokesman Mel Duvall said in an e-mail.
The cuts come as the company seeks to sell three large swaths of oil and gas properties in Western Canada that produce a total of 60,000 barrels of oil equivalent a day, enough output on which to base a sizable company in its own right. The assets could fetch $2-billion to $3-billion, based on the average value of recent transactions.
Husky is also considering divesting its royalty interests in Western Canada as well as a stake in pipeline and processing assets in the Lloydminster area of Alberta and Saskatchewan.
Husky's staff cuts add to the pain being experienced throughout the energy sector, which, according to the Canadian Association of Petroleum Producers, shed more than 40,000 jobs since the downturn began well over a year ago. Analysts have said they expect numerous companies to announce further reductions in budgets and staff numbers as the downturn persists.
On Tuesday, U.S. benchmark crude oil fell $1.75 (U.S.) to settle at $27.94 a barrel. According to a report by TD Securities, just 20 to 30 per cent of Canadian crude oil production generates positive cash flow at the current crude price.