Shell Canada vows to cut costs, not jobs

CALGARY — Shell Canada says there are no plans for layoffs despite falling oil prices and the restructuring of its parent, Royal Dutch-Shell Group.

“We don’t have any plans for workforce reductions, but we’re going to have to keep looking for cost reductions,” Shell Canada spokeswoman Janet Rowley told Canadian Press.

Royal Dutch-Shell, the world’s largest oil company, said yesterday it will subtract $4.5 billion US from fourth-quarter profits to pay for restructuring costs amid low commodities prices. The company said cost-cutting measures are expected to yield savings of $2.5 billion US a year by 2001. These include cutting nearly 6000 jobs worldwide.

In October, Calgary-based Shell Canada announced third-quarter profits of $76 million, 54% less than the same period last year. Shell Canada, a major producer of crude oil, natural gas, sulphur, and refined petroleum products, employs nearly 3600 workers, down from 4900 five years ago.

Shell Canada plans significant capital investments, however. These include a proposed $3.4-billion oil sands mine and extraction facility near Fort McMurray, Alta. Construction of the Muskeg River Mine would begin late next year, with production starting in 2002. The project is pending regulatory approval and the outcome of a feasibility study on the project.

Shell Canada is also ramping up its $3-billion Sable Island gas project off the east coast of Nova Scotia. The project employs 2000 people and is expected to produce about 500 million cubic feet of natural gas a day starting next year.

Amid Royal Dutch-Shell’s struggles, several oil companies have announced significant consolidations and revampings in the last few weeks, including Exxon Corp. and Mobil Corp., which plan a $73.7 billion US merger that when complete will make the combined company the largest energy producer in the world, surpassing Royal Dutch-Shell.

Oil prices continue to hover around 12-year lows.

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