PARIS – Technip has begun a restructuring plan and has accelerated its cost reduction in response to the decrease in oil prices.
The restructuring plan targets savings of €830 million ($909 million), of which €700 million ($767 million) is to be delivered in 2016 and the balance in 2017. There are one-off charges of €650 million ($712 million) to cover the different aspects of the plan.
The group will reduce its global workforce by approximately 6,000 and will pursue the streamlining of its activities started last year to focus on its core assets and activities.
A significant part of the restructuring plan covers the Onshore/Offshore segment and addresses its recent unsatisfactory performance. In parallel, the group will reinforce its investment in key geographic and technology areas where it sees an advantage, such as in FLNG.
Subsea performance continues to out-perform its initial 2015 expectations. Cost reduction will be in those markets where new project awards are under pressure (for example the North Sea).
Technip also plans to reduce its fleet. The originally planned would have reduced the fleet by two vessels this year but the group now intends to take out a further two vessels, one fully owned and one leased, taking the fleet down to 23 vessels from 36 at the end of 2013.