As many energy companies post surging 2nd quarter profits, Alberta’s job reports modest job growth

Several Calgary-based energy companies are reporting a surge in earnings for the second quarter of 2022, yet analysts don’t expect the energy boom to translate into an immediate rush of field jobs as companies recuperate from the financial toll extracted by the pandemic.

Suncor reported record-breaking earnings of $3.99 billion in the second quarter, more than quadruple the $868 million it earned in the same period of 2021.

“In the second quarter of 2022, Suncor reported the highest quarterly adjusted funds from operations in its history,” said Kris Smith, interim president and CEO of Suncor group during a conference call with investors on Friday.

Cenovus posted earnings of $2.4 billion in the second quarter, compared with $224 million a year earlier.

Canadian Natural said it earned $3.5 billion, up from $1.6 billion in the same quarter last year.

And MEG Energy also reported recent quarterly earnings of $225 million, up from $68 million from 12 months earlier.

“In the second quarter, MEG initiated its share buyback program and continued to make significant progress on debt reduction,” said Derek Evans, president and CEO MEG Energy, during a call with investors on July 29.

Other companies to report high quarterly profits include Pembina, Imperial Oil, Enbridge, TC Energy, Precision Drilling and Crescent Point, to name a few.

Some energy analysts say they expect energy companies will use the extra money to find balance, by focussing first on debt repayment and increasing shareholder profits.

“I think what most companies are going to do is to pay down some debt, increase the dividends to back to about where they were before,” said Bob Schulz, professor at the Haskayne School of Business at the University of Calgary.

Schulz also expects to see modest job growth in the sector, but also expansion of new jobs including data analytics for reducing emissions, tech position and expansion of automation.

Another analyst says this boom will be distinct, and doesn’t expect companies to hastily reinvest in upstream drilling projects that would bring back numerous jobs in the oil field.

“(During the COVID-19 pandemic) they all took a pretty big beating through that period,” said Kevin Birn, chief Canadian oil analyst for S&P Global Insights.

He added, “They’ll strengthen that balance sheet over the longer term, because it was a protracted period of lower prices that preceded even COVID-19.”

CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS

However, production hasn’t slowed down as demand for oil and natural gas remains high, according to the Canadian Association of Petroleum Producers (CAPP).

In a statement to CTV News, CAPP President and CEO Lisa Baiton says: “After nearly a decade of depressed commodity prices, producers in Canada have started increasing their investments which are expected to grow by at least $6 billion this year. As a result, we are reaching record high oil production in Canada as well as record high exports thanks to increased transportation capacity from the completion of the Line 3 expansion at the end of 2021.”

Baiton also said the industry will benefit from the completion of the TransMountain (TMX) expansion pipeline scheduled to flow in 2023.

The statement continued, “Producers are looking to maintain cost discipline and match growing production with transportation capacity. The world will continue to need responsibly produced oil and natural gas for years to come. And we believe that supply should come from Canada.

Alberta’s overall economy is also growing modestly, the July unemployment rate is 4.8 per cent according to Statistics Canada.

Calgary added 12,000 jobs last month.

“I am confident that our work to diversify and strengthen our economy will continue to provide more opportunities for more Albertans in the months ahead,” said Doug Schweitzer, Minister for Jobs, Economy and Innovation in a news release sent Friday.

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