Sunday, January 17, 2021

Optimism Cenovus-Husky merger will benefit Sask. operations

Optimism Cenovus-Husky merger will benefit Sask. operations

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“Husky was one of those players that were big, but weren’t quite big enough,” he said.

Dobni said that while it happened in a different industry, the Cenovus-Husky deal was reminiscent of the 2018 merger of Potash Corp. of Saskatchewan Inc. and Agrium Inc.that created Nutrien; PotashCorp brought production capacity to the deal, while Agrium’s retail and fertilizer production businesses brought the ability to add downstream value.

“Downstream is where the value is right now (in oil),” Dobni said.

With that in mind, thinks it unlikely that the merger will lead to major downsizing in Saskatchewan, but things would likely be worse in Calgary, where the company will remain headquartered, he said.

“There’s going to be, obviously, some ‘right-sizing’ if you want to call it that … but that usually happens at the managerial level. As far as frontline workers go, they’re going to be business-as-usual.”

A Cenovus spokesperson used the same phrase in a statement to The StarPhoenix regarding the company’s future plans in Saskatchewan.

“The transaction has officially closed and it’s business as usual at our operations,” the statement read. “It’s early days for the combined company and we’ll provide more insight on our business plans throughout the course of the year.”

Lloydminster Mayor Gerald Aalbers drew on his own 25 years in the oil business when he first saw reports of the impending merger.

“I’ve worked with Cenovus and Husky both as customers. They’re both world-class businesses and I think Cenovus will be a great addition to our community,” he said.

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