Offshore survey specialist PGS has implemented further cost reduction measures of about $400m through staff reductions, re-organisation, consolidation of offices, re-negotiation of service agreements and other cost measures.
The company said the Covid-19 pandemic and related disruption in the oil market have caused unprecedented challenges for the seismic industry and the company is responding to this challenge by further adjusting its cost base to the lower activity level while retaining its core global capabilities and ability to scale up when demand resumes.
PGS has earlier announced stacking of three out of the eight 3D vessels operated at the start of the year, and several other cost measures. The company will now take steps to address the lower market activity by further streamlining its organisation and reducing office-based personnel by around 40%, including reductions already implemented.
As part of streamlining, all commercial activities, including the current new ventures unit, will be combined into one business unit. The new organisation is expected to be implemented August 1, 2020.
“The current market situation is very challenging for the seismic industry. We are addressing the activity reduction and low visibility by adjusting operations and cost. We will scale down our organization significantly while retaining our core capabilities and scalability to be in position to take advantage of what we believe will be an improving market following the current crisis,” Rune Olav Pedersen, president and CEO of PGS.