National Oilwell Varco Slashes Another 20% of Norway Staff

By Kjetil Malkenes Hovland

OSLO--U.S. oil drilling equipment maker National Oilwell Varco Inc. (NOV) said Friday that it would lay off 520 workers in Norway, the latest move in a string of job reductions that has slashed 60% of its Norwegian workforce in a year, as oil industry subcontractors continue to suffer from waning orders.

The company had announced another round of mass layoffs earlier this month, but hadn't quantified the cuts until now. After the latest reductions, National Oilwell Varco will have around 1,900 employees in Norway, down from about 5,000 a year ago.

The supplier of offshore drilling equipment blamed its downsizing on waning orders, as oil majors are slashing costs and drilling activity. Its Norwegian unit cut 1,500 jobs last summer and another 900 in December amid weaker activity in the North Sea.

"We are experiencing strongly reduced investments in the oil and gas sector," National Oilwell Varco's Norwegian unit said. "The uncertain market situation means we can't say today how wide-reaching the downsizing process will be in the longer term."

National Oilwell Varco is being hurt by an overcapacity of rigs in the global offshore oil and gas industry. The company said this month that about 500 offshore rigs and drillships are active world-wide and about 300 units retired, with more retirements expected.

Brent crude has picked up in recent weeks and is trading around $44 a barrel, but the price remains about 60% lower than it was two years ago, affecting the sector's spending plans.

Oil companies operating in Norway, Western Europe's largest oil exporter, expect to spend 163.9 billion kroner ($20.0 billion) this year on oil and gas activity, almost a quarter below the record level of two years ago.

The Norwegian Oil and Gas association expects spending in the country's oil sector to bottom out in 2017 at 132 billion kroner.

Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com

(END) Dow Jones Newswires

April 22, 2016 08:38 ET (12:38 GMT)

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