Maneuvering through a weakened energy sector by joining forces is a "necessary" step for Norway's offshore service vessel market, executives said.
Three companies — Farstad Shipping, Deep Sea Supply and Solstad Offshore — said they would team up under a united restructuring plan aimed at giving them leverage at a time when industry spending is suppressed.
Citing sentiments expressed by industry experts, Jon Are Gummedal, CEO of Deep Sea Supply, said the nature of doing business in the post-$100 per barrel era required consolidation.
"The proposed combination is a necessary structural measure in today's offshore service vessel market, which will enable the combined company to achieve significant synergies through more efficient operations and a lower cost base," he said in a statement.
The three companies said their combined fleet would surpass 150, making it a world leader in the supply vessel market. The united front would do business as Solstad Farstad.
"When including all vessel classes and lower spec vessels, the company ranks fourth globally," it said.
Industry estimates find investments in Norway's petroleum sector account for about 25 percent of the productive capital in the country. Most spending and expense metrics decline through 2018 before slow recovery emerges.
Farstad Shipping CEO Karl Johan Bakken said the merger gives all three companies an industrial platform on which to survive the current market downturn and be primed for growth once recovery emerges.
Norway is the main supplier of oil and natural gas to the European economy, apart from Russia.
