Nexen Energy ULC, the Calgary-based company acquired by China's CNOOC Ltd. more than two years ago, says it's cutting 400 jobs. It says 340 of those will be in North America and the rest are with its U.K. North Sea operations.

The majority of the job losses will be in the head office in Calgary.

Despite the cuts, Nexen says it's fully compliant with commitments it made to the federal government when the controversial $15.1-billion deal was approved.

In a release, CEO Fang Zhi says Nexen had to look at ways to ensure its long-term viability and sustainability in the recent industry downturn.

Oil prices are at just US$43 a barrel, a steep drop from the levels above US$107 a barrel they reached last June.

Fang says while the job cuts are regrettable, they were necessary to align the company with its reduced spending program.

With files from CBC