Oil & Gas Engineering Low Oil Prices Takes its Toll on Oilfield Engineering: Technip Cuts 6.000 Jobs
Low oil prices and margins take their toll on oilfield engineering experts and suppliers Technip: The French company plans to lay off 6,000 of its 38,000 positions worldwide.
Paris/France – Cost reduction and strategical realignment shall help Technip to save some € 830 million. The planned restructuring measures are expected to result in one-off charges of € 650 million, company speakers stated.
The slowdown in the oil and gas industry is prolonged and harsh. Therefore we have decided to accelerate our cost reduction and efficiency measures – which I know will have tough consequences for employees across the Group”, states Thierry Pilenko, Chairman and CEO of Technip. “The launch of the plan today, together with our recent initiatives, such as our Forsys Subsea Joint Venture, shows our determination to maintain this strategy which is based on a long-term vision of how Technip can be best positioned to deliver our industry’s needs, to reduce project costs and continue to create value.”
Ships Laid Off, Operations Closed
The sharp fall in oil prices has had a substantial impact on clients’ behavior, national and international oil companies alike, Technip explains: New projects continue to be deferred as clients assess their investment priorities in a durably changed oil price environment, negotiations have been protracted on contract changes and variations, in particular on Onshore/Offshore projects. The French engineering experts conclude that these trends have not improved and, in some cases, have actually worsened over the last two months.
As part of the restructuring measures, the company plans to reduce its presence in some Onshore/Offshore markets where profitable business is unlikely even in the medium-term, including selected countries in Europe, Asia and Latin America including Brazil. Furthermore, Technip plans further efficiency programs in North Sea subsea operations as well as a reduction of its fleet by an additional two vessels (reducing the company’s fleet down to 23 vessels from 36 at the end of 2013. ).