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Image courtesy of Øyvind Hagen/Statoil ASA.

Norway’s Statoil said Friday it has scrapped plans to pursue a potential business center in Europe as it pursues further cost reductions.

The company said during a meeting with employee representatives that it has decided not to proceed with the evaluations of a potential business center in Europe.

Statoil added that, at the meeting, it was agreed that further efficiency improvements and cost reductions are needed and “that the employee representatives and management must continue their efforts to identify other actions to achieve this.”

“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. We have agreed to intensify our efforts to identify other measures that will enable us to achieve additional rationalization and cost reductions,” Statoil CFO Hans Jakob Hegge said.

In November 2015 the company started investigating a potential business center outside Norway to cut costs as part of an effort to boost “competitiveness in an environment of sustained low commodity prices that call for lasting cost reductions.”

The center would have hosted selected services within business support and procurement with a staff of about 180, with about half of the staff members holding internal positions.

“The evaluations have been thorough, and after an overall evaluation we choose not to progress this work. 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,” Hegge said.