Statoil ASA will cut as many as 2,000 more jobs by the end of next year as it reacts to lower crude prices by slashing costs.
Statoil plans to lose about 1,100 to 1,500 permanent employees and 525 consultants by the end of 2016, the Stavanger-based company said. More organizational changes will be announced by the end of the month, it said in a statement.
“The improvements are necessary to strengthen Statoil’s competitiveness and secure our future value creation,” Executive Vice President and COO Anders Opedal said. Statoil has already removed about 2,300 employees and consultants from its payroll since the end of 2013.
The job losses at Norway’s No. 1 oil and gas producer add to thousands more in the nation’s offshore energy industry since crude prices collapsed in the second half of 2014. Western Europe’s largest oil-producing country is bracing for the biggest reductions in offshore investments in 15 years.
Announced job cuts at oil companies and service providers since the beginning of 2014 now exceed 20,000, Oslo-based DNB Markets said by e-mail. Norway’s oil and gas industry employed about 250,000 directly and indirectly in 2014, accounting for almost 20% of gross domestic product, according to the government.
Statoil is trading 27% below its price 12 months ago. The shares slipped 0.4% to 140.4 kroner (US$18.08) at 1:42 p.m. in Oslo on Tuesday, extending a losing streak to four days.
The 67% government-owned company began a sweeping efficiency program at the end of 2013 to contain costs that had risen for a decade. It expects the program to yield savings of $1.7 billion a year starting in 2016.
“It’s natural and necessary that Statoil, as the biggest company on the Norwegian shelf and a large international player, must adapt to a new cost situation, like the industry as a whole,” Petroleum and Energy Minister Tord Lien said by e-mail.
The government has warned that oil-industry cost and spending reductions must not hurt efforts to maximize extraction from existing fields or new, profitable developments. Statoil is shrinking capital-spending 10% to about $18 billion this year while maintaining its dividend.
Statoil has so far reduced its workforce through voluntary agreements and aims to avoid forced measures over the next 18 months, said Magne Hovden, senior vice president for people and organization at Statoil.
Tuesday’s news confirmed reports in the daily paper Dagens Naeringsliv. Bloomberg News reported a year ago that the company was working on deeper cost reductions than announced, including a 20% shrinkage in technical staff.
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