Chevron Canada slashing jobs at its N.L. offices

Chevron, one of the companiesthat discovered the Hibernia oil fieldand the holder ofsignificant ownership stakes in Newfoundland and Labrador's offshore oil industry, is slashing its workforce in St. John's as part of a restructuring prompted by plunging oil prices.

Sources say the company will eliminate 60 per cent of the workforce at its Atlantic Canada office in St. John's, or roughly 20 jobs.

Some will be relocated to Calgary, sources say.

Leif Sollid, a senior Chevroncommunications official,toldCBC Newsthat assessments and planning for the restructuring have been going for several months.

"Chevron Canada is restructuring its organization to establish a competitive foundation that will position the business to deliver profitable long-term growth in our key focus areas of Alberta, British Columbia and Newfoundland and Labrador," he said in an email.

Sharp decline in revenues

Sources sayChevron isreducingits presence on the east coast as lower oil prices have taken a toll on the parent company.California-based Chevron Corp.has reported revenue declines of more than 50 per cent from a year ago.

The company is also stinging from an aggressive exploration program in the deepwater Orphan Basin off Newfoundland that turned up less-than-stellar results.

• Chevron hopes 3rd time's the charm in Orphan Basin

"Chevron came up dry while Statoilhit the motherlode," said one source familiar with the industry, referring to Statoil's Bay du Nord discovery in the Flemish Pass Basin.

Another source downplayed the likelihood of a dramaticdownsizing in St. John's, explaining that Chevron continues to have "major production and explorations interests" in the province.

A statement from the provincial Department of Natural Resources said "we have been advised that Chevron's ongoing business and community investments in the province will continue."

Chevron did not reply to specific questions about its operations in this province, including the number of employees at its St. John's office.

The Calgary Herald reported last week that Chevron was preparing to eliminate oneinfive of the positions at Chevron'sCalgary offices, where there are 800 employees.

The company also announced late last year it was shelving plans to drill a deepwater well in Canada'sBeaufort Sea because of plungingoil prices.

Spending cuts throughout energy sector

There have been sharp spending cuts throughout theenergy sector as companies navigate their way through lower prices, and Newfoundland and Labrador has not been immune.

Husky Energy, for example, announced in December it wasdeferring the final investment decision on its offshore West White Rose oilfield extension project for a year.

Chevron has played a significant role in the energy sector off Canada'a east coast for many years, and according to its website, discovered the Hibernia field in 1979.

This discovery was the catalyst that launched Newfoundland and Labrador's offshore energy sector.

Chevron holds a 26.9 per cent non-operator working interest in the Hibernia field, and accounts for most of the company's crude oil production.

Chevron holds a similar ownership stake in the Hebron field development project, which is expected to begin production in two years southeast of Hibernia.

Chevron also owns a one per cent interest in the Terra Nova project.

According to its website, Chevron will also be involved in exploratory drilling in the Flemish Pass Basin later this year.

"Chevron Canada is committed to responsibly developing Canada's energy resources and will continue to make significant investments going forward," Sollid wrote.