Analyst: – The oil industry has spent money like drunken sailors – Dagbladet.no

(Dagbladet): Friday woke Oil Norway up to yet another bad news. 2000 Statoil employees must go, 500 of them hired.

It reports Dagens Næringsliv, which calls cut the largest in the group ever.

The group has not even confirmed the number, but a larger cut in Statoil has been expected, said oil analysts. If not inevitable.

– This says something about how big the pressure is on the oil industry. The main one has, is the staff. To cut in employees is therefore the absolute last one does. It also says something about the expectations of the industry, said oil analyst Thina Saltvedt at Nordea Markets Dagbladet.

– Irresponsible spending

For an oil price near record low levels and a very high cost, says the analyst that cuts is absolutely necessary to continue operations in the future.

The oil companies, such as Statoil, however thank themselves for that bang is coming, and that it has been so great.

– The oil industry has spent money like drunken sailors. It’s easy to say afterwards, but now the party is over and they have to clean up, says Saltvedt.

Oil analyst Christopher Dahlberg at Sparebank 1 Markets, also believes oil companies have spent irresponsibly much money.

– There they were able to do previously because oil prices were so high, and profitability is still very good, says Dahlberg.

Golden Age is past

Now The situation is turned on its head. A golden age, as most analysts agree that the Norwegian oil industry has experienced over the past decade with a steeply rising oil prices is over, according Saltvedt.

– For Norway, the period over. It is difficult to see such a time come again, she says, and adds:

– Hopefully you learned something from it.

The profitability of oil production can still be good, but companies are forced to go through an extensive reorganization.

– Oil prices are likely to rise some as early as next year. It is more a question of when rates go up than if prices go up. Next summer may be more balance in the market but this restructuring takes time, many years, says Dahlberg in Sparebank 1 Markets.

Tough restructuring

For it does not help that oil prices go up, if the cost remain at their current level.

– There must be improved and there will be no doubt a tough restructuring period. Man is afraid that more jobs are lost. I fear it will get worse before it gets better, says Dahlberg.