St. John's catering company stung by departure of drill rigs

There are more job losses related to a slowdown in Newfoundland and Labrador's oil sector.

• Departure of GSF Grand Banks drill rig a 'temporary gap' in offshore
• Seadrill cancels order for West Mira drill rig at 11th hour

An official with East Coast Catering has confirmed the company recently had two contracts cancelled, resulting in the loss of 44 jobs.

The lost contracts are related to the departure of the GSF Grand Banks and the Henry Goodrich, two semi-submersible mobile offshore drill rigs with long histories in the offshore.

The Henry Goodrich left earlier this year while the GSF Grand Banks just recently concluded its contract with Husky Energy.

Both rigs are older and are likely to be scrapped, industry insiders say.

Their departure has resulted in the loss of hundreds of jobs, with some estimates putting the figure at more than 500. Many of those positions were held by residents of Newfoundland and Labrador.

Catering jobs a casualty of departed rigs

East Coast Catering provided catering and housekeeping services to both rigs.

A company spokesperson said the 44 jobs represent a "small fraction of our overall employee base in Newfoundland and Labrador."

"The majority of our business is not directly impacted by the recent drop in oil prices," the statement read.

East Coast Catering specializes in catering and accommodation services to offshore platforms and remote sites such as the Voisey's Bay nickel mine in Labrador.

The company also provides catering and housekeeping services onboard both the Terra Nova FPSO and the SeaRose FPSO, two oil production, storage and offloading vessels operating in Newfoundland's offshore.

East Coast Catering is based in St. John's, with regional offices in Happy Valley-Goose Bay and Halifax.

It is a subsidiary of Compass Group Canada, one of the country's largest providers of food service and support services.

A lull in requirements between drilling programs

Meanwhile, sources are also saying that job losses are occurring in other support services, including among those who crew offshore support vessels.

One of the companies that services the offshore, Atlantic Towing, referred questions to Husky Energy, one of the leading operators in Newfoundland's offshore.

In a statement, Husky said it has long-term contracts in place with Atlantic Towing and Maersk for supply vessels, and "what you may see is a lull in some of our requirements between drilling programs."

The drilling sector suffered another blow earlier this month when Seadrill announced it was cancelling its purchase of the West Mira, a sixth generation ultra-deepwater drill rig.

The rig is nearing completion in South Korea, with a crew of mostly Newfoundlanders, and was scheduled to arrive in offshore Newfoundland early in 2016 as part of a five-year contract with Husky.

Husky is still in the process of evaluating rigs for the offshore to replace the West Mira, a company official said.