ConocoPhillips to cut Canada workforce for second straight year

What happened

ConocoPhillips said it will announce job cuts in Canada's oil patch on Tuesday, the second straight year of layoffs there. The company did not say how many jobs are affected, after cutting its 13,000-strong global workforce by 20%-25%.

Confirmed

Global impact / market context

Fewer workers and contractors can lower operating costs at ConocoPhillips' Canadian oil sands and Montney operations, which supports profit per sale. It may also reduce local spending on services and equipment, affecting suppliers and nearby communities that depend on oil patch work.

Analyst inference

ConocoPhillips operates Surmont, an oil sands site producing 157K bbl/day in September and the fourth-largest in-situ oil sands well site. It is also an active driller in the Montney formation. Its last annual report listed 792 Canadian employees, or 8% of its global workforce.

Analyst inference

What to watch

1. The company plans to announce the Canadian job cuts on Tuesday, but it has not disclosed how many jobs are affected. Confirmed
2. Watch whether the cuts target oil sands operations such as Surmont or Montney drilling, since that would show where the company is reducing spending. Proposed
3. Track whether reduced headcount lowers operating costs and cash needs, or slows production work at Surmont, which produced 157K bbl/day in September. Analyst inference

Evidence

• seekingalpha.com