Marine seismic company Polarcus is set to reduce workforce and employees' salaries, and stack survey vessels, as a response to the uncertainty marine seismic industry is facing in the wake of the coronavirus pandemic, and the current low oil prices.
Polarcus on Tuesday evening announced cost-cutting measures, which the company expects to save it $15 million in 2020.
These include reducing personnel costs onshore and offshore by approximately USD 6.5 million through a combination of redundancies and a reduction in base salary for Polarcus employees for six months effective 1 April 2020.
"This entails a 25% reduction in base salary at senior levels and a 15% reduction applied to the remainder of the organization. In addition, the decision has been taken not to pay the 2019 annual bonus," Polarcus said.
Offshore Engineer has reached out to Polarcus for more details on how many people will be let go, and where. We will update the article with any response we may receive.
Further, Polarcus plans to reduce general and administrative expenses by approximately USD 1.5 million as a result of expected lower activity levels; and reduce cash Capex by about USD 7 million through the freezing of uncommitted expenditure.
Related: Polarcus' Project Cancellations Highlight Oil Price Slump
"Further cash savings are expected to be realized through warm stacking vessels in between projects and associated, disciplined reduction in offshore operating cost. This will mitigate the anticipated elevated idle time of the Polarcus fleet in the coming months," Polarcus said.
New contract
In a separate statement on Wednesday morning, the Oslo-listed company said it had won an offshore survey contract in North-West Europe.
Polarcus said the project would begin in the second quarter of 2020, with a duration of three months. The company did not provide any details on the financial terms of the deal, nor on the identity of the client.
Worth noting, Polarcus used the photo of its Polarcus Adira vessel to illustrate a social media post announcing the contract. Marine Traffic data show the vessel is currently in moving from the Gulf of Guinea in West Africa to Las Palmas, Canary Islands.
The new contract comes after Polarcus in the past month lost two survey deals in Africa in Asia.
COVID-19 precautions
When it comes to COVID-19 response in the offshore environment, Polarcus has said it is screening all field crew before traveling from home, immediately before joining a vessel and then at regular intervals throughout operations offshore.
"All Polarcus vessels carry medical teams onboard with fully equipped hospital facilities and the ability to isolate crew members if required," Polarcus said Tuesday.