Norway’s North Energy is to implement additional redundancies and cost-cutting measures from 2016, which the oil and gas producer hopes will allow it to weather “persistent difficult market conditions”.
The company plans to close its offices at Tromsø and Stavanger, where its staff will be made redundant. After the closures, all North’s activities will be handled from its Oslo office.
The Oslo-listed company hopes the cost savings will help to reduce its annual operating costs to around NOK 10m ($1.2m) after tax.
Acting CEO Knut Sæberg called the redundancies “regrettable” and said the firm will support those affected to the best of its ability.
“The board of North Energy must respond to the persistently difficult and to some extent deteriorating market conditions affecting our industry,” Anders Onarheim, chair of North’s board of directors, commented today.
“All the signs are that we must expect a tough market to endure for a long time to come and, against that backdrop, feel we must take additional responsible steps.”
“Robust finances are crucial in today’s market,” Onarheim continued. “Our financial position gives us valuable flexibility with regard both to possible future commitments and to possible strategic choices of direction.”
The company is primarily involved in the exploration and production of oil and gas on the Norwegian continental shelf and in Russian waters in the Barents Sea.
North said it is assessing “different strategic directions” for the company in order to create value for shareholders.
Onarheim said the company’s future strategy could include mergers and amalgamations: “We believe substantial synergies could lie in establishing larger and more robust companies.”