New Statoil cuts worry suppliers and employees

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Even though Norway’s state oil company Statoil reported some large losses on Thursday, its share price soared because investors hailed the company’s plans to sharply reduce planned investments. That worries both suppliers and employees, who fear the consequences.

Statoil’s operating results for the fourth quarter of last year were almost cut in half from the year before, but that didn’t worry analysts and investors. They sent the company’s share price up 8.2 percent by midday. Despite the losses tied to low oil prices, analysts viewed Statoil’s results as strong.

That’s mostly because of the deep cuts Statoil is making in investments, just as Oslo-based DNB Markets was reporting that Norway’s oil industry is likely to have lost 30,000 jobs because of the dive in oil prices. Now Statoil is planning to cuts its investments to USD 13 billion, from the USD 18 billion announced last year.

For Statoil’s own account of its latest results, click here (external link).

“My fear is that this will lead to new (job) cuts both within Statoil and among its suppliers,” Professor Klaus Mohn of the University of Agder told state broadcaster NRK. Statoil employees’ representative Bjørn Asle Teige is especially worried about what the new investment cuts will mean for Norway’s oil industry. He fears even more job cuts on top of the thousands cut during the past two years.

newsinenglish.no staff