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Wednesday , 2 December 2020

Cenovus/Husky highlight integration, job losses unknown locally

Reports of job cuts surround the Husky/Cenovus merger, but there is no word if Lakeland or Lloydminster employees will be affected.

The two companies announced the all-stock transaction on Sunday, which is worth $23.6 billion.

The combined companies will be based out of Calgary and operate as Cenovus once the deal is finalized.

It was reported earlier this week the merger could result in close to 2,150 employees without a job mainly in Calgary.

The companies stated the merger could include combining resources to optimize production, which may be the case for Husky’s Lloydminster assets.

Alexander J. Pourbaix Cenovus Energy Inc. CEO, President & Director, said the deal will provide additional opportunities “drive incremental synergies” during a conference on Sunday night for Lakeland area production to Lloydminster.

“This includes physically integrating Cenovus’ low-cost production at Foster Creek, Christina Lake with the Lloyd refining and upgrading complex.”

Husky said this plan isn’t included in the $600 million of cash flow synergies.

Cenovus Energy Inc. Executive VP & CFO Jonathan M. McKenzie said the combination will optimize Lloydminster’s refinery and upgrader.

“So short-term opportunities that we are looking at are things like can we run FCCL crude through those assets and move the Lloyd blend to market, which gives us a much better — could give us a much better netback in terms of how we think about the revenue line and those kinds of things.”

He adds this will be a short to medium-term goal.

“Longer term, there will be opportunities for us to think about more molecular integration at Lloydminster, but those opportunities are out in the future.”

This is expected to happen in the first quarter of 2021 and will produce 750,000 barrels of oil per day.

Husky said until the transaction closes the companies will operate as separate, independent companies.

The announcement came days before both Cenovus and Husky are scheduled to report on third-quarter results on Thursday.

With files by Tre Lopushinsky.

About Michael Menzies

Menzies is the editor-at-large for Connected Media Inc. Born and raised in Vermilion, he started in May 2018 during his NAIT Radio and Television practicum and reports on local politics, sports, and community issues. He became the Bonnyville Pontiacs play-by-play voice during the 2019-20 season. He also comments on provincial and national issues. Menzies hosts Connected! Evening Monday-Thursday at 5 o’clock. He also likes to buy books and read some of them.