Oslo: Few nations’ offshore sectors have been hit harder by the oil price drop than Norway, yet Erna Solberg, the country’s prime minister, remains defiant that Norwegian offshore firms can ride out the current doldrums.
Utilisation rates for OSVs around Norway have dropped by around 50%, rates have fallen 20% and asset prices are off by up to 20%.
In an exclusive interview with Maritime CEO, Solberg, 54, says Norwegian offshore is going through a major period of reform, yet it is not in crisis.
“We have a structural change,” she says. “There are lower investments in the oil sector which we saw one and a half years ago which was what I challenged the former government before I came prime minister saying they were not preparing for this. That is a long-term change for a new situation.”
Solberg, who became prime minister in October 2013, says many oil activities have been postponed, but the situation today is on a level with 2011.
“It is not a crisis,” she stresses, adding: “We have had an extremely high cost level because of a lack of manpower and large influx of people coming in from other countries. Part of this change has been solved by the fact less people are coming here to work.”
Solberg declines to comment on where she sees the price of oil going in the coming months.
Nevertheless, with prices down, news of ships and rigs being laid up and people laid off have become near daily occurrences in Norway this year, however Solberg maintains unemployment as a whole remains low in the Scandinavian country. Registered unemployment stands at 2.9%, and the estimated number of unemployed people including those not claiming benefits stands at 4%. Maritime jobs account for around 110,000 people in Norway, a country with a population of 5m.
Solberg maintains that Norway’s high cost base is both a challenge and an opportunity.
“One of the reasons why Norway is an innovative country, why we have a very high productivity,” she says, “is because labour costs are high so we have been using more technology and less manpower and that is a competitive edge for Norway and we still have to keep that.”
Solberg and her government released on Friday a new maritime strategy dubbed Blue Growth for a Green Future. She also spoke at the opening of the Nor-Shipping conference yesterday, in which she said: “The future for Norway lies in being smarter, not being cheaper, that is why we are investing so much in research, knowledge and development.”