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Thursday, June 13, 2024

Norway loses world’s biggest rig firm

The mayor of Stavanger is among those left “sad” and “disappointed” after Seadrill, which Norwegian tycoon John Fredriksen built into the world’s largest offshore rig company, confirmed it was moving its headquarters out of Norway. The move comes several years after Fredriksen himself gave up his Norwegian citizenship in a dispute with state authorities over tax issues.

The “West Orion” drilling rig is part of Seadrill’s large and growing fleet. Now Norway is losing the company’s headquarters operations, and along with it a loss of jobs and prestige. PHOTO: Seadrill

Now Fredriksen and his board of directors have decided that Norway’s high costs, difficulty in attracting highly qualified personnel and distance from key markets makes it impractical and less profitable for Seadrill to remain based in Stavanger. The company likely will move its headquarters to either London, Dubai, Singapore or Houston, with a decision due by the end of the year.

Respected Seadrill chief executive Alf C Thorkildsen, who’s a Stavanger native, quit on the spot after losing his fight to keep the company in Norway’s oil capital. He left after earning as much as NOK 180 million during the past few years, reported newspaper Dagens Næringsliv (DN), while Seadrill’s other roughly 160 employees are left with an uncertain future.

Seadrill’s new CEO Fredrik Halvorsen PHOTO: Seadrill

“I think of course that it’s very sad they’ve decided to move,” Stavanger Mayor Christine Sagen Helgø of the Conservative Party told DN. “Seadrill is a strategically important company and its main office functions that have been here in Stavanger. I don’t like this at all.”

Helgø said she had sent a letter to Fredriksen asking for a meeting last month, when reports of a possible move started circulating. She never received an answer and had sent another letter early this week. She still hasn’t heard back and now realizes it’s unlikely she’d be able to get Fredriksen to change his mind.

“But I still expect to make contact,” she said. “I wrote in the letter that regardless of what the company decides to do, I’d still like a dialogue to learn how they’re thinking and if there’s anything we can do to be an even better host city for this type of company.”

Fredriksen, also a major shipowner who ranks as one of the wealthiest men in the world, has never hidden his dissatisfaction with Norway’s tax regime or what he sees as restrictions placed on his companies. He now lives officially in London, has a passport from Cyprus and can only spend limited amounts of time in his homeland since he gave up his Norwegian citizenship.

Seadrill is his latest major success, following years of building up major shipping fleets and also getting heavily involved in fish farming and other businesses. The company, registered in Bermuda along with several of Fredriksen’s other firms, was set up just seven years ago and then took over both Mosvold Drilling and Smedvig. The deepwater drilling company now outranks rival Halliburton, operating what it calls a “versatile” fleet of 67 units for offshore operations, also in shallow water. Fredriksen publicly thanked Thorkildsen for “the fantastic job” he’d done in guiding Seadrill’s expansion and profitability.

All told Seadrill has 7,900 employees around the world and is listed on the New York and Oslo stock exchanges. Fredrik Halvorsen, considered a 38-year-old “wonderboy” in Norwegian business, was quickly named to take over as chief executive, with 35-year-old Rune Magnus Lundetræ taking on the post of finance director.

“A guy in his 30s has much greater work capacity,” claimed Fredriksen’s right-hand man Olav Trøim. He said it was part of Seadrill’s long-term strategy to “renew the organization and use the talents you have.” He also had no sentimental attachment to Stavanger, claiming that a more international location is important for further recruitment to Seadrill.

“If you ask folks in the oil business where they want to work, and they can choose between London, Singapore and Stavanger, they’re not going to say Stavanger,” Trøim told DN. “It’s not high on the list.”

Views and News from Norway/Nina Berglund

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