COSL hit by Statoil cancellation. 229 workers must go

COSL Drilling Europe is facing a tough decision after Statoil said it would cancel the contract for the COSL Pioneer semi-submersible drilling rig in Norway, citing overcapacity and lack of work.

“This is the heaviest day in our company’s relatively short history. With this cancellation, we come to a point where we have to make a powerful downsizing both onshore and offshore,” Jørgen Arnesen, CEO of COSL Drilling Europe said in a statement, Norwegian news website Sysla has reported.

According to Sysla, COSL will now be forced to lay off 209 offshore workers and 20 employees onshore. In addition, some employees will be offered other positions within the company.

Update: June 25, 2015, 1:35 p.m. (CET)

Offshore Energy Today has contacted the COSL Pioneer rig manager Arild Stakkestad who has confirmed the contract has been cancelled.

“COSL will obviously do their utmost to secure a new contract for the rig as soon as possible,”  Stakkestad said.

We have also obtained a statement by COSL regarding the issue. You can read it below in full:

“Yesterday COSL agreed with Statoil to cancel the COSLPioneer contract with immediate impact. The background for Statoil’s conclusion is an overcapacity within the company’s rigfleet. COSLPioneer has supplied supreme results for Statoil during the contract period and the decision is based exclusively on commercial considerations.

COSL Drilling Europe has until now had COSLPioneer laid off since last October and COSLRigmar laid off since May this year. In this period, the company has chosen to keep all employees based on planned start up with COSLPioneer in August. Unfortunately we have with this cancellation reached a point where we are forced to carry out a solid cut in the workforce both onshore and offshore.

Unfortunately temporary lay-off is not an alternative as we cannot see opportunities for employment for the rigs within the coming 6 – 12 months.

It is a very dramatic situation for the company and all our employees and the company has together with the union representatives agreed on the principles for the cuts in the workforce, where seniority will apply under otherwise similar conditions. Such conditions will be real and formal competence, work performance, flexibility and possible social circumstances.

As a total, the cuts in the workforce will include 209 employees offshore and 20 employees onshore. In addition some personnel will be offered other positions in the company. For personnel directly affected by this process, we will try to send out the message today (Wednesday). This message will mainly contain an offer of discussion with the company and the union representatives if required.

Today is the darkest day in our company’s relatively short history, and it is both difficult and regrettable that we have to take this step.”

Offshore Energy Today Staff