Around 11,000 employees in the Norwegian oil industry have been laid off so far since the oil price began to slide and many companies subsequently put investments and projects on hold. And more layoffs could be underway among subcontractors before things get better, says Norwegian oil analyst Jarand Rystad according to offshore.no.
Jarand Rystad warned at a conference in Stavanger that the industry will go through another grueling round of layoffs before the conditions become more normal, and he even points to improvements from as early as next year for parts of the subcontracting industry.
“We will actually see increased activity. More new platforms will be starting up than are shut down. And we can drill more wells. With more platforms, more wells and more complex fields, we’ll need more hands and brains toward 2020,” says Jarand Rystad, who bases this optimism on a steadily rising oil price.
Certain segments that are, in Rystad’s words, placed early in the cycle – such as the seismic industry as well as engineering businesses – will note an improvement already in 2016, while other companies in segments such as equipment and newbuildings will have to wait until 2018.
Jarand Rystad’s analysis falls well in line with that of the Norwegian Petroleum Directorate, which estimates that investments on the Norwegian Shelf will decrease around 15 percent from 2014 to 2015, and by another eight percent to 2017 before flattening out and increased moderately from 2018 and going forward.