Norwegian offshore companies are experiencing a wave of layoffs

2014-12-17 09:00

Affected by the downturn in investment in Norway's oil and gas industry, companies in the Norwegian oil and gas services sector (including ocean engineering enterprises and service providers, etc.) have generally been cutting spending and laying off staff. Previously, well-known companies including Aker Solutions, Bilfinger, IKM Weatherford, and Aibel have already begun large-scale layoffs.

As major clients such as Statoil begin to cut costs, the Norwegian offshore vessel industry has also begun a wave of layoffs. It is understood that Norwegian offshore vessel owners DOF Subsea and Island Offshore will lay off more than 100 employees.

DOF Subsea has issued temporary layoff notices to 31 employees responsible for ROV and survey operations, and may lay off these employees before the end of the year. DOF Subsea has a total of 144 offshore employees in Norway, and the number of employees laid off exceeds one-fifth of the total.

Jan Kristian Haukeland, head of Atlantic operations at DOF Subsea, said that offshore market activity in the North Sea is expected to pick up in the spring of next year, and the company hopes to find more work for these temporarily laid-off employees by April next year to avoid permanent layoffs.

Although DOF Subsea's offshore vessels have secured maintenance and installation contracts in Norway for 2015, Haukeland still pointed out that operations in these areas have significantly decreased, and many operators, including Statoil, may reduce their operations in the future.

Statoil has begun to reduce maintenance and drilling activities, hoping to cut costs through these measures, while the recent drop in oil prices has dealt a further blow to the market. A spokesperson for the DOF Subsea union said that temporarily laid-off employees of DOF Subsea may be able to find work in overseas markets.

Meanwhile, Island Offshore is also considering temporarily laying off 75 employees working on an idle offshore vessel. Vice President Tommy Walaunet confirmed that these employees have received temporary layoff notices, but the final decision still depends on whether the company can find new work for the idle offshore vessel. The company will make a final decision by the end of this month.

Recently, Karmorneftegaz, a joint venture between ExxonMobil and Rosneft, cancelled charter contracts totaling 700 million Norwegian kroner (approximately US$95 million), involving four shipowners: Island Offshore, Viking Supply, Rem Offshore, and Siem Offshore. Among them, the charter for Island Offshore's specialized vessel, "Island Crown," was cancelled.

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