More woes for the Norwegian oil and gas industry as Statoil announced it would cut potentially 1100-1500 permanent positions and 525 consultants by the end of 2016.
"We regret the need for further reductions, but the improvements are necessary to strengthen Statoil’s competitiveness and secure our future value creation," said Anders Opedal, executive vice president and chief operating officer in Statoil.
Statoil says a strict reduction program has been in place since 2013, and since its implementation, the Norwegian company has reduced its workforce by 1340 permanent employees and 995 external consultants.
The company says the reductions are part of its commitment to delivering US$1.7 billion in annual savings from the improvement program in 2016, and beyond.
Also announced today (16 June), Norwegian-headquartered Electromagnetic Geoservices ASA (EMGS) announced further cost reductions including cutting 20% of its staff and cutting one vessel from its fleet. EMGS also plans to cut its capital expenditures (CAPEX) by 50%.
EMGS said the reductions reflect not only the challenging market conditions, but attributed the need for further cuts – from those employed earlier this year – to delays in contract negotiations and lower than expected demand for EM data.
The company hopes that the reductions will save $35 million compared to 2014. EMGS expects restructuring charges of approximately $1.3 million, in addition to a provision related to loss on the EM Leader charter agreement of $1.5 million will be booked in 2Q 2015. The key elements of the program will be effective from the beginning of the 3Q 2015, the company stated.
Despite the market conditions, the company says it remains confident about future growth in the long term.
In a 2014 OE article on geoscience trends, TGS CEO Robert Hobbs named EMGS specifically for the company's electromagnetic (EM) technology, as a trend his business is monitoring.
“I think it is a valid tool, in certain types of geology," he said at the time. "We’re focused on identifying the areas where it works and where it is synergistic with our seismic activities."
Last week, Aker Solutions and FMC Technologies announced they would reduce their workforces in Norway. Aker said 150-200 positions will be affected, while FMC Technologies planned to cut an additional 400 jobs in the country.
Offshore.no, a Norwegian news outlet, is reporting that Transocean plans to cut 250 jobs in Norway.
Image: The EM Leader
Read more
Subscribe
