PGS wields costs axe as market bites
- Business & Finance
PGS said it will implement further cost reductions as seismic industry takes major hit on Covid-19 and oil market disruption.
Specifically, this includes staff reductions, re-organization, consolidation of offices, re-negotiation of service agreements and other cost measures.
This should also bring annual gross cash cost run-rate to approximately $400 million, from initial $600 million, PGS said.
PGS has earlier announced stacking of three out of the eight 3D vessels operated at the start of the year, and several other cost measures.
The company will reduce office-based personnel by approximately 40 per cent, including reductions already implemented.
PGS will operate five 3D vessels, but it could adjust operated vessel capacity and offshore crew levels further if required.
Furthermore, PGS’ New Ventures unit, will combine into one business unit, Sales & Services, led by Nathan Oliver.
Berit Osnes who currently leads New Ventures will take a key management role in Sales & Services following re-organization.
The new organization is expected to be implemented August 1, 2020.
Rune Olav Pedersen, president & CEO, said:
“The current market situation is very challenging for the seismic industry. “
“We are addressing the activity reduction and low visibility by adjusting operations and cost.
“We will scale down our organization significantly while retaining our core capabilities and scalability to be in position to take advantage of what we believe will be an improving market following the current crisis.”