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Nexen to shed 350 jobs following January Alberta oilsands plant explosion

14 July 2016

Nexen Energy of Canada said on July 12 it would cut 350 jobs this year after deciding not to repair its Long Lake oil-sands upgrader in northern Alberta following a fatal explosion in January. The facility, which processes bitumen into light synthetic crude oil, cannot be feasibly repaired in the short term, company executives told reporters. Workers will lose their jobs at Long Lake and at the Calgary headquarters. 

Image: Nexen
Image: Nexen

Since the blast, which killed two, only parts of the upgrader have been running and it has not been producing synthetic crude. The company will put the facility into winter preservation and has no set date to return the plant to full service, the executives said. After an investigation, the company found that the explosion was the result of employees doing work outside the scope of what had been approved.

The incident highlights gaps in safety that are being addressed with more training, education and increased oversight from management, they said, and a final report has not been published.

The company also outlined the root cause of a pipeline spill that was discovered July 15, 2015, which caused five million litres of bitumen, sand and produced water to leak. The clean-up cost to the company was less than $50 million.

Executives said the leak happened after a pipeline incompatible with the ground conditions buckled, and the company’s monitoring processes did not immediately detect it. Nexen is changing its pipeline planning and operations policies to prevent future incidents.

Nexen CEO Fang Zhi said: “We failed to live up to our own highs standards of safety and environment,” Zhi said. “This is not acceptable.”

Executives said the decision not to repair the upgrader was partly due to extremely tough market conditions since mid-2014.

Nexen was acquired by CNOOC of China in 2013.

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