Norway's Equinor to axe 30% of exploration staff amid oil slump

Suban Abdulla
·3 mins read
Like many energy companies across the world, the state-controlled firm has also been hit by the coronavirus crisis. Photo:  Budrul Chukrut/SOPA Images/LightRocket via Getty
Like many energy companies across the world, the state-controlled firm has also been hit by the coronavirus pandemic. Photo: Budrul Chukrut/SOPA/LightRocket via Getty

Norwegian gas and oil company, Equinor (EQNR) has announced its slashing 30% of the workforce in its exploration unit, to increase efficiency and reduce cost.

Equinor did not give an exact number but said “hundreds of jobs” will be affected worldwide, by the end of 2022.

Spokesman Erik Haaland told Yahoo Finance, that the company plans to reduce the UK exploration staff by around 60%. He said that a process had been “initiated to increase efficiency and reduce cost in the UK exploration team”, which is mainly based in London.

But, the reductions will not have an immediate impact on exploration plans, Haaland said in an email.

“For 2020 we expect to drill around 30-40 wells globally, and this announcement does not affect the planned activity level for 2020 and 2021.”

Equinor’s exploration spending has decreased by about a third from six to seven years ago. The firm said that it plans to focus on selected areas when searching for new gas and oil resources, including in the US, Brazil and Norway.

Previously, Equinor said it was planning to spend $1.1bn (£853m) on exploration this year, whereas in February it expected to spend $1.4bn.

READ MORE: Oil prices fall as COVID-19 cases spike

In August, Equinor confirmed it was making job cuts in the UK, Canada and US in response to the oil downturn.

Meanwhile, the majority state-controlled firm said it will keep production going after dozens of its staff went on strike at the company’s Johan Sverdrup oilfield, largest in western Europe.

Following the company’s announcement, Norway’s Lederne labour union vowed to escalate its offshore industrial action to four other Equinor fields next week.

Like many energy companies across the world, Equinor has also been hit by the coronavirus crisis, after the pandemic reduced demand for petroleum.

On Wednesday, Royal Dutch Shell (RDSB.L) revealed that it will cut 7,000 to 9,000 jobs as part of a major restructuring plan to shift the oil and gas giant to low-carbon energy.

READ MORE: Stocks fall as Trump tests positive for COVID-19

The jobs cuts equate to just over 10% of its workforce. Shell has 83,000 employees, according to its figures at the end of 2019.

The group confirmed in its third quarter update that the headcount cull is set save the group $2bn to $2.5bn by 2022.

On Thursday, shares in BP (BP.L) sank to a 25-year-low after oil prices fell back towards $40 a barrel.

Rising COVID-19 cases have once more put oil prices under pressure, after more than doubling their gains since hitting record lows in April — the height of the coronavirus pandemic.

The company, which had 21,000 employees at the end of 2019, said it would offer staff in some locations, severance packages. But, it will tackle cuts in Norway differently, by giving staff other jobs leaving the rest of reductions to natural attrition, as the state owns a majority stake in the company.