Oil group Subsea 7 to sack a fifth of workers

Oil services group Subsea 7 said on Tuesday that it would cut close to a fifth of its workforce and sell a quarter of its fleet because of falling oil prices.

Oil group Subsea 7 to sack a fifth of workers
Gunvor Ulstein, chairman of Subsea 7 receives the Ship of the Year award from Crown Prince Haakon in 2013. Photo: Berit Roald / NTB scanpix
The company, which is based in Luxembourg but listed on the Oslo stock exchange, said the measures were necessary “in view of the difficult business and economic conditions in the oil and gas market and declining workload.”
“It is envisaged that the overall reduction in the global workforce would be approximately 2,500 by early 2016, down from the 13,000 reported at the end of 2014,” Subsea 7 said in a statement.
The group provided no details on which divisions or geographic locations would be affected, indicating only that consultations had been held with employees in Norway and Britain.
It also said it planned to sell up to 11 of its vessels, of a fleet of 39 in use and five under construction.
“These cost reduction plans will allow us not only to adapt to present market challenges but also to maintain our competitiveness and the long-term viability of our business,” the company's chief executive Jean Cahuzac said.
“This will enable us to emerge stronger once the downturn ends. Reducing employment is not a decision we take lightly but one that is necessary in today's difficult oil and gas environment.”
Like many of its rivals, Subsea 7 has suffered from the slump in oil prices, which has forced many energy groups to postpone or cancel investments and projects.
Despite new orders worth $1.0 billion (888 million euros), Subsea's order book fell to $7.61 billion at the end of the first quarter, from $8.24 billion a year earlier.
According to DNB Markets, some 15,000 jobs have been slashed in the Norwegian oil sector since 2013.
In February, unemployment in Norway reached its highest level in 10 years, climbing to 4.1 percent. Oil and gas account for more than a fifth of the country's gross domestic product.
Norwegian oil giant Statoil may cut 2,400 jobs, or more than 10 percent of its workforce, Norwegian media has reported.
In late afternoon trading, the Subsea 7 share price was up 1.36 percent at 85.95 kroner on the Oslo stock exchange


NGOs take Norway to European Court over Arctic oil exploration

Two NGOs and six young climate activists have decided to take Norway to the European Court of Human Rights (ECHR) to demand the cancellation of oil permits in the Arctic, Greenpeace announced on Tuesday.

NGOs take Norway to European Court over Arctic oil exploration
Northern Norway. Photo by Vidar Nordli-Mathisen on Unsplash.

It’s the latest turn in a legal tussle between environmental organisations Greenpeace and Young Friends of the Earth Norway on one side and the Norwegian state on the other.

The organisations are demanding the government cancel 10 oil exploration licenses in the Barents Sea awarded in 2016, arguing it was unconstitutional.

Referring to the Paris Agreement, which seeks to limit global warming to less than two degrees Celsius above pre-industrial levels, the organisations claim that the oil licenses violated article 112 of Norway’s constitution, guaranteeing everyone the right to a healthy environment.”

The six activists, alongside Greenpeace Nordic and Young Friends of the Earth Norway, hope that the European Court of Human Rights will hear their case and find that Norway’s oil expansion is in breach of human rights,” Greenpeace said in a statement.

In December, Norway’s Supreme Court rejected the claim brought by the organisations, their third successive legal defeat.

READ MORE: Norway sees oil in its future despite IEA’s warnings 

While most of the judges on the court agreed that article 112 could be invoked if the state failed to meet its climate and environmental obligations– they did not think it was applicable in this case.

The court also held that the granting of oil permits was not contrary to the European Convention on Human Rights, in part because they did not represent “a real and immediate risk” to life and physical integrity.

“The young activists and the environmental organisations argue that this judgment was flawed, as it discounted the significance of their environmental constitutional rights and did not take into account an accurate assessment of the consequences of climate change for the coming generations,” Greenpeace said.

On Friday, the Norwegian government unveiled a white paper on the country’s energy future, which still includes oil exploration despite a warning from the International Energy Agency (IEA).

The IEA recently warned that all future fossil fuel projects must be scrapped if the world is to reach net-zero carbon emissions by 2050.

The Norwegian case is an example of a global trend in which climate activists are increasingly turning to courts to pursue their agenda.