Enbridge cuts jobs, defers capex spend as falling demand limits oil flows

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CALGARY (Bloomberg) --Enbridge Inc., North America’s largest pipeline operator, is cutting jobs, lowering executive pay and deferring some capital spending as measures to fight the Covid-19 virus reduce oil flows on its system and slow down construction.

About C$1 billion ($710 million) of capital spending will be delayed as distancing measures change its construction schedules, the Calgary-based company said in a statement Thursday. Enbridge also is cutting C$300 million in operating costs through company-wide salary rollbacks, reductions to outside services and a voluntary workforce-reduction plan. The company didn’t specify how many jobs may be cut.

With measures to slow the spread of the Covid-19 virus causing an unprecedented drop in oil demand, Enbridge said volumes on its Mainline crude network fell 400,000 barrels a day in April, a 14% drop from average throughput in the first quarter. That’s a rare and large decline on a network that Enbridge said typically operates at or near its capacity.

North America’s oversupply of crude has opened some new opportunities for Enbridge as well. The company last week struck a deal with shippers to use a section of an old oil pipeline running between Saskatchewan and Manitoba to temporarily store more than 900,000 barrels of crude starting in June.