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Low Oil Prices Prompt Statoil To Cut Even More Jobs
Submitted by Andy Tully via Oilprice.com,
Once more Statoil is reducing its richest asset – employees – in order to keep financial losses to a minimum because of low oil prices. It will eliminate up to 1,500 full-time jobs and 500 temporary consultant positions by the end of 2016.
“We regret the need for further reductions,” Statoil Chief Operating Officer Anders Opedal said June 16, “but the improvements are necessary to strengthen Statoil’s competitiveness and secure our future value creation.
The goal is to save $1.7 billion per year beginning in 2016 under a cost-savings plan drawn up in 2013. Its original goal was merely to corral spending, which had risen gradually during the previous decade. The company saw a stronger need to save after the price of oil collapsed beginning in late June 2014.
And while Statoil is maintaining its dividend for shareholders, it is reducing capital spending by 10 percent to about $18 billion for 2015 alone.
So far, Statoil – two-thirds of which is owned by the government of Norway – has postponed and even abandoned energy exploration projects in its effort to save money, and has eliminated the jobs of 1,340 full-time employees and 995 consultants since the end of 2013.
Now the company will go further, eliminating between 1,100 and 1,500 full-time positions and 525 consultant jobs, or about 7 percent of its remaining workforce. More specific numbers won’t be available until sometime this fall.
Statoil’s workers are among the highest paid in the energy industry, even at a time when the company’s chief product, Brent oil, has plunged in value by $50 per barrel.
In a statement, Statoil said the layoffs so far have been mutually agreed upon by both the company and the affected employees, and that it hopes to keep it that way. “We have so far solved the workforce surplus through voluntary measures,” it said, “and maintain the ambition to conduct the people process over the next 18 months without forced measures.”
Statoil also appears not to be ready to acquire smaller companies that may be struggling, as Royal Dutch Shell did in buying BG Group. Eldar Saetre, Statoil’s CEO, said in an interview published June 9 in the Financial Times that such acquisitions are too expensive.
“There is really nothing cheap out there, no big bargains to be made,” Saetre said. “The big transformation stuff is challenging.”
Norway’s government agrees. “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 in an e-mail.
Nevertheless, Oslo has cautioned that such cost-cutting must not interfere with the efforts by the country’s energy industry to get the most out of its existing oil and gas fields and initiate new, profitable projects.
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I predict Norways "official" unemployment will fall. I took Obama-logic 101.
The MSM predicted oil prices will rise, but something leads me to believe they will soon fallout... (Again)
Houston-based Hercules Offshore Inc. (Nasdaq: HERO) has reached a restructuring agreement with a majority of its debtholders to reduce the company’s debt and secure additional liquidity.
Hercules expects to proceed with the reorganization plan by filing for Chapter 11 bankruptcy protection by July 8.
http://www.bizjournals.com/houston/news/2015/06/18/houston-offshore-dril...
glad I quit working for Stat a few years ago when they were pissing away money in Canada
Does anyone care about unemployment when we have a phantom economy with nearly zero inflation and unemployment of only 5.5%. Norway just has to emulate the lies of the leader of the free world - just lie yourself to infinite prosperity:
Every statistic about the US economy is now a lie as David Stockman looks at 5.5% unemployment:
At the present time, there are 210 million adult Americans between the ages of 16 and 68—to take a plausible measure of the potential work force. That amounts to 420 billion potential labor hours, if we accept the convention that all adults are at least theoretically capable of holding a full-time job (2,000 hours/year) and pulling their share of society’s need for production and work effort.
By contrast, during 2014 only 240 billion hours were actually supplied to the US economy, according to the BLS estimates. Technically, therefore, there were 180 billion unemployed labor hours, meaning that the real unemployment rate was 42.9%, not 5.5%!
Yes, we have to allow for non-working wives, students, the disabled, early retirees and coupon clippers. We also have drifters, grifters, welfare cheats, bums and people between jobs, enrolled in training programs, on sabbaticals and much else.
http://davidstockmanscontracorner.com/the-warren-buffett-economy-why-its...
Inflation in the land of the free is not so phantom though - Chapwood Index shows real inflation in US.In 2014, it was 9.7% - 1212% of official US inflation (0.8%)
http://www.chapwoodindex.com/
I don't know what's freakier -
The fact that governments think they can lie to everybody and get away with it....
....or that the people paying taxes to these governments don't notice, or worse, don't care.
Obamacare is beginning to wake people up. I've had several conversations with angry people specifically about the cost effects of that beast. I hope these people follow the thread far enough to realize that this is just the tip of the iceberg and has nothing to do with red / blue BS peddled by MSM.
Good Lord.
Five hundred temporary consultants ... lol. No wonder they're in financial trouble.
Luckily for Sweeden they have real good unempolyment benefits. Looks like thousands of oil workers will pick up hobbies and sit around watching soccer.
^^^ Krugman's productivity
:)
Hey Eldar Saetre. How about a little CEO pay cut to save 1000 jobs? Never let a good income crisis go to waste.
We need artificial intel to replace our inneficient decision makers. The Carbon Based units must be limited
At some point soon Norway and all of the EU are going to have to cut the Socialist parasites and hire some real workers to keep the lights on, or maybe not, maybe they'll go the way of South Africa and Zimbabwe and Venezuela and.... and just keep looting tll there's nothing left then move on to drug peddling
Is Beau Biden still on the payroll? (too soon?)
Not just oil is hurting. I just got the report yesterday that 1/2 of all Iron Ore Miners on the Minnesota Iron Range are now in layoff. Not only that, it is now believed 1 or 2 of the mines shut down may be targeted for permanent closure. These mines operate on the margine of the world market, being high cost producers, whereas Brazil miners produce high grade ore which is cheaper. Brazil announced 6 months ago that they will maintain high production levels despite crashing ore prices, in order to capture more market share. Our layed off miners are most likely going to suffer most by this market share price war. Just like oil, those who produce for less are trying to squeeze out those on the margine. US Frackers are being killed, though the carnage has not yet worked it's way through the system and US Iron Miners also are being squeezed out. All this in the midst of a big economic recovery! Layoffs and recovery go hand in hand! And Minnesota based Target Corp, is still firing headquarters staff, another 150 yesterday! Recovery is only on Wall Street!
Recovery is only on Wall Street!
please know that i will plagiarize that comment.
They also bet big on Iraqi oil theft http://cnsnews.com/news/article/statoil-talks-sell-share-iraq-oil-field
BLS says unemployment going down. It's called the Obama recovery!
Hmmm...
I thought that having State-Owned energy companies who use the proceeds in social-vote-buying programs, while not booking those programs as part of the energy-company's expenses, were supposed to be more efficient?
They were going to drive the shale operators out of business?
Because Statism and Authoritarianism are so much better, lacking that much-publicized-but-little-demonstrated Capitalist tendency to self-destruction, than the alternatives?
Its time they dip ino that trillion dollar sovereign fund of theirs that makes every citizen a millionaire.Solialism where it works correctly if they would actually use that money for something other than future needs..
Statoil said the layoffs so far have been mutually agreed upon by both the company and the affected employees,
I wonder how much it cost to persuade the employees to agree to be laid off.
Statoil has to lay off employees to pay the 13 year lease they signed on their office tower on the west side of Houston.
Gonna be a ghost town....