Aberdeen facing further setback
Oil price slump prompts Technip to axe 6,000 jobs worldwide
The Paris-based company, which operates mainly out of Houston, employs around a thousand staff in Aberdeen in subsea installation work and needs to take £600 million out of its budget over the next two and a half years because of the falling oil price.
The bulk of those savings will take place next year. It said it will accelerate the cost-cutting “in anticipation of an even more challenging environment in oil and gas.”
Chief executive Thierry Pilenko said: “The slowdown in the oil and gas industry is prolonged and harsh,” adding that this has led the firm to accelerate its cost reductions and efficiency improvements, “which will have tough consequences for employees across the group.”
In a statement the company added: “The sharp fall in oil prices has had a substantial impact on clients’ behaviour”.
It said projects continue to be deferred as clients assess their investment priorities in a “durably changed oil price environment”.
The company said that on occasion “there appears to be irrational behaviour in bidding on some of the projects that are being sanctioned; negotiations have been protracted on contract changes and variations, in particular on onshore/offshore projects, where some discussions are now even stopped and will find their resolution through a legal process.
“We conclude that these trends have not improved and, in some cases, have actually worsened over the last two months.”
Technip said it plans to scale back its assets, including through sales or closures, of its presence in some markets where profitable business is “unlikely even in the medium-term, including selected countries in Europe, Asia and Latin America including Brazil.”
It said it will put more money behind key geographic regions and technologies in which it has a larger footprint, such as floating liquefied natural gas facilities.