Norway's Statoil drops plan to set up business center in Europe

Norwegian oil and gas company Statoil said on Friday it has decided not to proceed with the evaluations of a potential business center in Europe.

The decision was presented at a meeting with employee representatives on Friday and it was agreed that further efficiency improvements and cost reductions were needed, the Norwegian company said in a statement.

The employee representatives and management agreed they must continue their efforts to identify other actions to achieve this, it added.

In November 2015 the company started investigating the basis for a business center outside Norway to cut costs. The evaluations were part of the efforts to increase Statoil's competitiveness in an environment of sustained low commodity prices that call for lasting cost reductions.

Selected services within business support and procurement were in scope for this center. The considered number of employees was around 180, approximately half of them internal positions.

"Our industry is currently facing a very demanding situation. Substantial, lasting cost reductions are therefore needed. There is a joint understanding of this by the company and the employee representatives," Hans Jakob Hegge, Statoil's chief financial officer, was quoted as saying.

"The evaluations have been thorough, and after an overall evaluation we choose not to progress this work," Hegge said. "We must therefore identify other measures to reduce the level of costs."

"Management and employee representatives share a common goal of strengthening the company's competitiveness and profitability," he added. Enditem