Downturn in the oilpatch strikes home - Metro US

Downturn in the oilpatch strikes home

Laurentian Energy Corp. is laying off 15 employees from its steel fabrication plant at Sydport outside of Sydney.

The announcement was made by company officials during a meeting Monday morning following the decision by Laurentian’s client, Nabors Canada, to temporarily suspend work on a $35-million contract to construct two land-based drill rigs for gas fields in northeastern British Columbia.

The layoffs are directly related to the dramatic drop in the demand for oil and natural gas, which has hit Alberta’s oil patch particularly hard, said Laurentian Energy chief executive officer Jim Wooder.

“We’re just caught up in what’s a much bigger problem. Companies simply don’t want to commit capital at a time when there’s no obvious use for the product,” he said.

“We’re hopeful that once gas prices recover these rigs are going to be very much in demand again and we’ll carry on. But if you don’t need to spend money now then clearly that’s the commercially sound business decision to take.”

The Laurentian-built rigs are about 30 per cent complete, and Nabors has committed more than 50 per cent of the overall cost.

Wooder said steps will be taken to ensure the parts of the rigs already completed and equipment that has been used are properly secured.

The rigs were to be commissioned in the spring.

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