Oil prices continued their sideways…
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Following Enbridge Inc.’s takeover of Houston-based energy firm Spectra, the company has plans to lay off roughly six percent of its employees, according to a new report by The Globe and Mail.
The 1,000-position cut will reduce the overlap in responsibilities between employees who worked at Spectra and Enbridge’s current operational structure, the company said.
Calgary is now the combined corporation’s home base, while Houston has become the center of Enbridge’s pipeline operations. The cuts will occur across the company, spokesman Todd Nogier said, without giving specific details.
Enbridge CEO Al Monaco previously said that 60 percent of post-merger cost cuts within Spectra would occur within 2017, with an additional 30 percent occurring in 2018.
Houston has lost over 91,000 jobs in oil and gas industry since the end of 2014 when oil prices crashed, starting an industry rut of over two and a half years.
Prices have mostly stayed above $50 a barrel since the Organization of Petroleum Countries (OPEC) announced a production cut of 1.2 million barrels per day in order to reverse excessive oil supply.
There are signs that a rebound for Houston’s oil and gas sector is on the horizon. The Dallas wing of the Federal Reserve Bank said that signs of recovery have emerged in the Permian – which includes portions of Texas and New Mexico. Texas’s oil and gas employment increased in August 2016 —a first since 2014—suggesting that the worst of the energy crisis may be over.
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“Houston, which has been hard hit by the bust, saw employment gains in August,” the Dallas Fed statement said.
The oil price hike has brought dozens of drills online across the country, to the ire of Saudi Arabia – the de facto leader of OPEC. The increased U.S. shale output threatens to reverse the effects of the bloc’s production cut strategy.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…