Teekay, a marine energy transportation, storage and production company, has decided to slash its workforce by 70 positions over a recent contract loss for the FPSO Petrojarl Varg.

Namely, the contract for Teekay’s floating, production, storage and offloading unit operating on the Varg field in the North Sea, the Petrojarl Varg, was cancelled by the field operator, Repsol, after the Spanish oil company decided to plug and abandon the field.

The decision to shut down the Varg field was made because, according to Repsol, the field was no longer considered profitable.

Teekay’s spokesperson told Offshore Energy Today in February this year that the termination was agreed in November 2015 with a retrospective termination date effective August 1, 2015. The FPSO Petrojarl Varg is now scheduled to leave the field by August 1, 2016.

Following several news reports saying that 70 of Teekay’s employees will have to go, Offshore Energy Today has reached out to Teekay seeking confirmation of these reports. Teekay’s spokesperson said that following the departure from the field, the Varg FPSO would go into layup.

The spokesperson further added: “Although Teekay continues to work actively on a number of options for redeployment of the Varg FPSO both inside and outside of Norway, it has become necessary to reduce our offshore crew by 70 employees.

“It is always sad to see good colleagues go, but unfortunately we have to adapt our crewing levels to these new circumstances. We have worked closely with employee representatives and the relevant trade unions and are currently in the process of informing the impacted crews.”

Teekay also recently reduced its workforce in Trondheim, Norway due to lower activity levels and the impact of the low oil prices.

Petrojarl Varg is a ship-shaped, turret moored, FPSO delivered in 1998. The FPSO has a storage capacity of 470,000 bbls and accommodation for 77 persons.

Regarding the progress of the decommissioning process on the Varg field, Repsol recently awarded a contract to DeepOcean for provision of engineering, procurement, removal and disposal of Varg subsea facilities, offshore Norway.

DeepOcean’s scope of work covers subsea pre-decom survey, recovery of FPSO mooring lines, anchor piles, risers, midwater-arch buoy and subsea structures as well as onshore disposal and recycling of the recovered items.