NOI Natl Oilwell

OSLO—National Oilwell Varco said Monday that it would continue slashing jobs in Norway, after laying off 2,400 workers—half of its local staff—last year, as sinking oil-sector investment continues to hammer major industry subcontractors.

"We are signaling mass layoffs," said a spokesman for National Oilwell Varco's Norwegian unit. "We're starting negotiations with our employees now, and will have the accurate number ready within a few weeks."

The company blamed its continued downsizing on deteriorating market conditions, with reduced investment and weak equipment sales. Over the past year, National Oilwell Varco has shed 1,800 permanent jobs and 600 contractors in Norway amid weaker activity in the North Sea.

Delivering offshore drilling equipment, National Oilwell Varco is exposed to the global offshore oil and gas sector and its overcapacity of drillships, jackup rigs, semi-submersible rigs and floating rigs. The company said about 500 offshore rigs and drillships are active globally, and about 300 units are retired so far, with more retirements expected, and no rapid rebound expected.

"The market shows no sign of improvement," the NOV spokesman said. "We have a significant overcapacity compared with our shrinking order reserve. We have too many employees, and we have to do something about it."

Oil companies operating in Norway, Western Europe's largest oil exporter, expect to spend 163.9 billion kroner ($19.7 billion) this year on existing oil and gas fields, new developments, and exploration, almost a quarter below the all-time spending high in 2014.

The Norwegian Oil and Gas association expects spending in the country's oil sector to bottom out in 2017 at 132 billion kroner.

Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com

(END) Dow Jones Newswires

April 04, 2016 07:25 ET (11:25 GMT)

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