Repsol SA, the Spanish oil company that took over Calgary-based Talisman Energy Inc. this year, is cutting 1,500 jobs as it seeks to reshape itself against a backdrop of depressed world oil prices.
Repsol did not say how many of the cuts will be in Canada, one of 40 countries in which it now operates. The staff reductions, to be made over three years, represent almost 6 per cent of the company’s global work force.
"Repsol said when it acquired Talisman that we would seek to transform our whole organization, using the best from both legacy companies,” Repsol spokesman Brent Anderson said. "We are undertaking a worldwide transformation. This is part of a long-term process.”
The company will release more details at its strategy meeting on Oct. 15, when top executives will lay out plans for the next five years, Mr. Anderson said.
About 200 people were let go from Talisman’s Calgary office in March, before the $8.3-billion (U.S.) takeover was finalized.
The deal gave Repsol extensive oil and gas operations in Canada, the United States, the North Sea and Southeast Asia and boosted its reserves by 55 per cent. Before the takeover, Talisman had about 2,800 employees around the world, about 1,300 of them in Calgary.
Any cuts will only add to steep job losses weighing heavily on the Alberta economy. More than 35,000 people have been thrown out of work in the Canadian energy sector since oil prices began their skid to current levels of less than $46 a barrel, about half the price of a year ago.
Last month, ConocoPhillips Co., Penn West Petroleum Ltd. and PHX Energy Services Corp. were among companies that cut hundreds of jobs. More layoffs are expected in the coming months as energy producers devise their budgets for 2016 with less cash to reinvest in operations and lenders demanding asset sales to keep debt in line with loan agreements.
For Repsol, word of the staff reductions follows about $1-billion worth of divestment, including the recent sales of part of its piped gas business and a 10 per cent stake in oil pipeline operator Compania Logistica de Hidrocarburo. On Monday, it sold three exploration blocks off the coast of Newfoundland to BG Group for an undisclosed sum.
The company’s shares have been under pressure since the Talisman deal closed in May, lifting the dividend yield to a hefty 10 per cent. That shows investors have been worried about Repsol’s debt, Royal Bank of Canada analyst Biraj Borkhataria wrote in a note to clients.
The asset sales are expected to ease those concerns, and investors should react positively to more details at Repsol’s upcoming strategy event, Mr. Borkhataria said.
(www.theglobeandmail.com)
