CANADIAN ASSOCIATION TO TRIM OPERATIONS

The Canadian Petroleum Association will close three of its six offices and reduce staff and programs to cut costs. The association, headquartered in Calgary, will close offices in Vancouver, B.C., Regina, Sask., and St. John's, Newf., leaving offices in Calgary, Ottawa, and Halifax, N.S. The cuts and a reduction in committee and research activity are designed to save $1.5 million/year, or about 15% of CPA's budget. The organization has 63 member companies, representing about 80% of

Nov. 11, 1991

2 min read

The Canadian Petroleum Association will close three of its six offices and reduce staff and programs to cut costs.

The association, headquartered in Calgary, will close offices in Vancouver, B.C., Regina, Sask., and St. John's, Newf., leaving offices in Calgary, Ottawa, and Halifax, N.S. The cuts and a reduction in committee and research activity are designed to save $1.5 million/year, or about 15% of CPA's budget. The organization has 63 member companies, representing about 80% of Canada's oil production and 70% of its gas production.

CPA Pres. Ian Smyth said the cuts reflect the state of the industry and the ability of members to pay for services.

CPA Chairman Lorne Gordon warned that the industry is facing serious financial problems and will continue to shrink unless provincial royalties are reduced.

Gordon said CPA is trying to battle a perception that the oil business is a great business. He quoted a report by PowerWest Financial Ltd. that said the upstream sector has been unprofitable since the mid-1980s.

Gordon estimated that 1991 upstream profits will be about $200 million, compared with $1.7 billion in 1990, Wells drilled in 1992 likely will decline to 4,700 from an estimated 5,600 this year. The association said petroleum industry jobs have dropped to 80,000 this year from 140,000 in 1985.

The Independent Petroleum Association of Canada issued a similar warning of a gloomy outlook.

Alberta Energy Minister Rick Orman said he is working on a modest aid program for oil companies to revive drilling. Orman said any program would apply to oil drilling and not natural gas, which is in surplus.

Alberta Premier Don Getty said the government will consider industry requests for royalty cuts, but there is no flexibility to cut them. Getty noted the government's revenues from royalties have been cut by low oil prices.