National Oilwell Varco Signals Further Mass Layoffs in Norway
April 04 2016 - 7:23AM
Dow Jones News
By Kjetil Malkenes Hovland
OSLO-- National Oilwell Varco said Monday that it would continue
slashing jobs in Norway, after laying off 2,400 workers--half of
its local staff--last year, as sinking oil-sector investment
continues to hammer major industry subcontractors.
"We are signaling mass layoffs," said a spokesman for National
Oilwell Varco's Norwegian unit. "We're starting negotiations with
our employees now, and will have the accurate number ready within a
few weeks."
The company blamed its continued downsizing on deteriorating
market conditions, with reduced investment and weak equipment
sales. Over the past year, National Oilwell Varco has shed 1,800
permanent jobs and 600 contractors in Norway amid weaker activity
in the North Sea.
Delivering offshore drilling equipment, National Oilwell Varco
is exposed to the global offshore oil and gas sector and its
overcapacity of drillships, jackup rigs, semi-submersible rigs and
floating rigs. The company said about 500 offshore rigs and
drillships are active globally, and about 300 units are retired so
far, with more retirements expected, and no rapid rebound
expected.
"The market shows no sign of improvement," the NOV spokesman
said. "We have a significant overcapacity compared with our
shrinking order reserve. We have too many employees, and we have to
do something about it."
Oil companies operating in Norway, Western Europe's largest oil
exporter, expect to spend 163.9 billion kroner ($19.7 billion) this
year on existing oil and gas fields, new developments, and
exploration, almost a quarter below the all-time spending high in
2014.
The Norwegian Oil and Gas association expects spending in the
country's oil sector to bottom out in 2017 at 132 billion
kroner.
Write to Kjetil Malkenes Hovland at
kjetilmalkenes.hovland@wsj.com
(END) Dow Jones Newswires
April 04, 2016 07:08 ET (11:08 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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