STAVANGER, Norway, Dec. 5 (UPI) -- Current market conditions are making it difficult to sustain drilling operations in Norwegian territorial waters, a procurement director at Statoil said Friday.
The bear market for crude oil has forced some in the industry to scale back on their near-term investment forecasts. Brent crude oil prices traded near the $69 per barrel mark Friday for the January contract.
Statoil procurement head Jon Arnt Jacobsen said the company was suspending contracts for four rigs because of lower profitability.
"This situation is unfortunate, and we are doing what we can to minimize the extent of the suspensions," he said in a statement.
The company last month suspended operations for rigs working in the Barents Sea through the end of the year, including Transocean Spitsbergen, which has a day rate of $535,000.
Analysis from Ernst & Young finds most of the investments of on the Norwegian Continental Shelf are based on oil below the $80 per mark. As crude oil lost more than 30 percent of its value this year, Statoil was forced to slash costs by more than $1 billion per year.
The Norwegian Oil and Gas Association, the industry's lobbying group in the country, drafted its annual report on the Norwegian energy sector with the assumption the world economy is still fragile six years after the global recession and at a time when oil prices are at their lowest level in four years.
Norway has more oil reserves than any other European country, exporting 1.19 million bpd on average primarily to the Dutch and British economies.