Norway's Biggest Bank Sees More But Small-Scale Oil Industry Restructuring Ahead

By On August 28, 2018

Norway's Biggest Bank Sees More But Small-Scale Oil Industry Restructuring Ahead

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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…

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Norway’s Biggest Bank Sees More But Small-Scale Oil Industry Restructuring Ahead Lofoten Norway

The biggest financial services group in Norway and a major lender to the oil and gas sector, DNB, expects more restructuring in the industry ahead, but on a smaller, more limited scale in a few segments, amid improved outlook on the industry, DNB’s chief executive Rune Bjerke told Reuters on Tuesday.

“We see some restructuring ahead, but to a very limited le vel. We have been through most of the cases where we have been involved as a bank,” Bjerke said in an interview with Reuters on the sidelines of an oil industry conference in Stavanger, Norway.

The oil industry went through a lot of restructuring and consolidation after the oil prices crashed in 2014 and stayed ‘lower-for-longer’ for three years, as companies tried to overcome the oil price slump with restructuring and mergers and acquisitions deals.

According to DNB’s chief executive, the industry is likely to further consolidate, but deals now will be more ‘event-driven’.

The Norwegian bank has reduced some of its exposure to the oil sector, by US$12 billion (100 billion Norwegian crowns) over the past few years, Bjerke said, noting that “We are more or less done with the rebalancing.”

The most restructuring ahead is expected in the two markets that are still in overcapacity: rigs and offshore supply vessels, according to DNB’s top executi ve.

“These are the two sectors where we are not through it yet,” Bjerke told Reuters.

Last month, the chief executive of offshore rig provider Seadrill, which emerged from Chapter 11 in July, told Reuters that the drilling market could improve with the help of consolidation among smaller offshore rig firms.

“Anybody with the fleet of less than 10-15 rigs probably needs to be consolidated ... All who don’t have scale are candidates for consolidation,” Seadrill chief executive Anton Dibowitz told Reuters in an interview in early July.

By Tsvetana Paraskova for Oilprice.com

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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…

More Info

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Leave a commentSource: Google News Norway | Netizen 24 Norway

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