Photo from UNIAN
Italian oil and gas industry contractor Saipem S.p.A. intends to dismiss 9,000 of its employees in connection with the abandoned South Stream pipeline project, Deutsche Welle's Russian News Service reported.
The number of employees will be reduced by 8,800, with a total number of employees amounting to 50,000. In the first half of 2015 Saipem reported a loss of EUR 920 million.
Saipem expects cumulative savings of EUR 1.3 billion in the next three years to improve the company's competitive positioning in its core business area.
"The further steep fall in the oil price has resulted in a major disruption, which is not likely to be reversed in the short-to-medium term and has resulted in clients taking an increasingly rigid approach in the operational and commercial management of contracts," according to the company's statement summing up the H1, 2015 results.
As earlier reported, in December 2014, Russia announced that the South Stream gas pipeline would not go ahead. After freezing the South Stream project, Russia proposed an alternative route to Turkey.
Saipem, controlled by Italy's state-run oil producer Eni SpA, was the main contractor at the South Stream and had two deals worth EUR 2.4 billion.
The Milan-based company was supposed to build the first line of the undersea pipeline, starting last year, and provide support services for construction of the second line in the link.
On July 8, South Stream Transport B.V., a Gazprom unit, informed Saipem S.p.A. about the termination of the contract on the construction of the first line signed in the framework of the South Stream project in 2014.
The pipeline was planned to run under the Black Sea to southern and central Europe, providing another transit route for Gazprom.
Earlier, Gazprom suspended work on the eastern branch of the Southern Corridor pipeline. The Southern Corridor was originally designed to supply gas to the South Stream gas pipeline, and after the abandonment of the project, it was supposed to feed the Turkish Stream with gas.