Husky Energy Reports $304M In Losses Over Last Several Months

Calgary-based Husky Energy is reporting $304 million in losses in Canadian currency over the last three months as the COVID-19 pandemic has eroded global demand for fuel. The company has cut capital spending on projects, including its $750 million Superior refinery rebuild.

Husky’s oil refinery in Superior is in the process of being rebuilt after it was damaged by an explosion and series of fires in April 2018.

In an announcement Thursday, CEO Rob Peabody said the company moved quickly to reduce capital spending and took cost-saving measures amid the market downturn.

“The actions we took included cutting 2020 capital spending in half by $1.7 billion, targeting about $150 million in cost efficiencies, reducing capital spending at the Superior refinery and in conjunction with the board, lowering the dividend,” said Peabody in a conference call.

Husky spent $310 million in the last several months, including $63 million on the Superior refinery rebuild. A company spokesperson said reduced spending on the rebuild this year is due to the temporary suspension of work, noting that it will not amount to an overall reduction in spending on the project. Husky expects the rebuild to be “substantially” covered by insurance.

WPR reported in June that construction resumed at the refinery, which the company said Thursday is taking place under “strict health and safety protocols.” The company now expects the rebuild project will wrap up in 2022 due to the pandemic. Officials had previously said they hoped to resume operations next year.

The April 2018 incident at the Superior refinery caused three-dozen people to seek medical care and a temporary evacuation of some city residents due to the presence of hydrogen fluoride. The chemical can be hazardous to human health if released.

The company typically employs around 200 workers year-round.

Husky’s losses over the last several months are a stark contrast from the company’s reported profits of $370 million at the same time last year. Husky reported $1.7 billion in losses due to the coronavirus pandemic in the first three months of this year. Oil production fell by 21,000 barrels to 247,000 barrels per day.