BAKU, Azerbaijan, May 7
By Leman Zeynalova – Trend:
Maersk Drilling,a drilling rig operator based in Denmark, has revised the guidance for capital expenditure in 2020, Trend reports with reference to the company.
The revised guidance reflects expected adjustments to the existing contracts based on current customer dialogues, no additional contracts with financial impact in 2020, and COVID-19 related costs. To adapt the cost structure to the new business environment, Maersk Drilling has taken precautionary measures, including stacking of rigs and revised maintenance programs.
Moreover, Maersk Drilling has taken steps to adapt the offshore crew pool to the lower activity in the offshore drilling market. Further, the need for onshore support is expected to be adversely impacted by the reduced offshore activity. Therefore, Maersk Drilling intends to reduce its onshore organization in the Danish headquarters and offices globally, and that steps have been taken to initiate consultations with employee representatives and trade unions where such consultations are required locally.
Maersk Drilling expects that the initiated steps will lead to a total of 150-170 onshore redundancies globally. The consultation processes will follow varying timelines in compliance with local regulations.
On 20 March 2020, Maersk Drilling revised its profitability guidance for 2020 for EBITDA before special items to $325-375 million. Since then, oil and gas companies have announced further reductions in spending budgets and sanctioning of new projects and ongoing tenders have been postponed or cancelled. Further, certain existing contracts have been renegotiated, suspended or terminated.
Consequently, Maersk Drilling has re-assessed the commercial and operational assumptions underlying the financial forecasts for 2020 and revises its guidance for 2020 for EBITDA before special items to $250-300 million (previous guidance of $325-375 million).
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