PGS to restructure, reduce fleet

Petroleum Geo-Services ASA has reported that it plans to implement a new structure by the end of the year.

Offshore staff

OSLO, NorwayPetroleum Geo-Services ASA has reported that it plans to implement a new structure by the end of the year. Restructuring cost is estimated to be about $40-50 million.

The company said that the new centralized, simplified, and streamlined organization builds on the two business areas: Sales & Services and Operations & Technology.

Sales & Services will contain three departments: Sales, New Ventures, and Imaging. Sales will promote and sell all products and services through a coordinated customer and marketing approach. New Ventures will be responsible for building new MultiClient programs worldwide and evaluate other cash generating opportunities across the PGS product lines, including strategic positioning in new basins. Imaging will produce the final seismic data to internal and external customers.

Operations & Technology will contain six departments: Project Planning & Bidding, Project Delivery, Maritime, Technical, Operations Geophysics and Geoscience & Engineering. Project Planning & Bidding will plan and calculate all acquisition surveys and prepare bids for proprietary work. Project Delivery will be responsible for execution of all seismic acquisition projects. Maritime, Technical, and Operations Geophysics will jointly manage and operate its vessels, seismic equipment, and technology. Geoscience & Engineering will develop new technologies that improve operational efficiency and imaging quality.

In addition, PGS intends to operate a fleet of eight vessels, of which two will be used selectively to address demand swings and market seasonality. The cost base for the company will be reduced to a baseline of six vessels, while the flexible capacity will be managed and crewed by a combination of regular and temporary employees.

President and CEO Rune Olav Pedersen said: “This downturn has been longer and lower than anyone anticipated. We think the worst is behind us, but I cannot bet the company on a market recovery. We need to change what we can control ourselves.

“The reorganization, combined with more flexible vessel capacity makes us better positioned to address the current market environment and improve cash flow and profitability.”

The company has also reduced its executive management team from six to four. Sverre Strandenes will be EVP and responsible for Sales & Services, Per Arild Reksnes will be EVP and lead Operations & Technology, and Gottfred Langseth will continue as EVP and CFO.

10/26/2017

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