Korean-owned Harvest Operations Corp. confirmed Wednesday that it will delay the startup of its BlackGold oilsands project while the company continues to pare its workforce in the face of lower oil prices.
“We unfortunately (have) had to reduce our total workforce number by 105 positions,” spokesman Greg Foofat said in a telephone interview
“It wasn’t done all at once,” he said, adding that the reductions have been underway since the beginning of the year.
“It’s just due to the lower expected plant operations due to lower commodity prices. It’s not just us, it’s our entire industry that has been impacted by lower commodity prices.”
The layoffs include both temporary and permanent staff as well as contractors and include positions in Calgary as well as in the field. BlackGold is accounting for about 30 of the layoffs in all three categories.
Harvest had between 500 and 600 permanent and part-time staff before the layoffs began.
Meanwhile, Foofat said the 10,000-barrel-a-day BlackGold thermal project has been completed mechanically.
“But once you start steaming you can’t stop,” he said. “So if we were start steaming and start producing right now it would be very marginal returns. So it makes more sense for us to wait for more favourable heavy oil commodity prices before were actually start steaming.”
Foofat suggested it would take prices for West Texas Intermediate crude to reach US$60 a barrel to make BlackGold feasible. The May crude oil contract was up $2.49 at US$50.09 a barrel on Wednesday, less than half the US$107 a barrel it commanded last summer.
Harvest Operations Corp. is a wholly-owned subsidiary of Korea National Oil Corp., with operations in British Columbia, Alberta and Saskatchewan.