2020 was a particularly challenging year for the energy industry. The dramatic slow-down in business activity, caused by the Covid-19 crisis, reduced revenues in PGS by close to 40 % compared to 2019, significantly complicated field operations, and left PGS no other choice than to immediately implement cost reduction measures.
We reduced our vessel capacity to match the market decline by stacking three vessels. The effects of the pandemic on energy demand similarly forced us to let go approximately 40% of our workforce. This was dramatic for individuals and teams, and our focus was on conducting the process fairly, thoroughly, and swiftly.
Significant staff reductions meant we had to reorganize and simplify processes. We retained our global footprint, maintaining critical presence in key markets, and centralized strategic functions. Our commercial activities were consolidated into a single unit – Sales & Services. A new entity was created to manage digitalization initiatives, research and development, enterprise IT and compute infrastructure – Technology & Digitalization. Going forward this unit will enable us to capitalize further on important digital synergies across our service offering. The new organization aligns our business to a lower activity level, but with the flexibility to scale up without adding cost proportionately.
Despite the challenges, our relentless focus on HSEQ and ESG matters continued with full force. Our commitment to the ten principles of the United Nations Global Compact in the areas of human rights, labor, environment, and anti-corruption applies in bad times as in good, as we proved in 2020. That commitment is evidenced by this report.
Rune Olav Pedersen
President and CEO
February 23, 2021
