EY Norway - An advantageous market in challenging times
Updated: Feb 6, 2019
The oil and gas sector is globally known to be a knowledge and capital-intensive industry. Therefore, oil and gas companies and their suppliers are in constant need of business expertise and advisory services. Ernst & Young, as one of the Big 4, is a global company employing approximately 50,000 people who conduct business all over the world. Throughout the years, the firm has had a major focus and interest in industrial sectors, specifically oil and gas. “The firm has been a strong partner of the Norwegian oil and gas sector and we have kept a leading position in the market for many years by using our insights of the sector and providing top-quality services across the industry,” says Espen Norheim, Nordic Industry leader for Oil, Gas, and Energy at EY Norway.
In 2012, EY further formalized its focus on industry sectors by reorganizing the firm to transfer the sector’s expertise to them. E. Norheim says that in Norway, there is a demand for the full spectrum of services that Ernst Young provides. “The firm is a market leader in some services and a runner-up in others,” says E. Norheim. “I would argue that EY plays a leading role in audit and tax advisory, we are very strong in transaction-related services, and a runner-up in management consulting,” he adds. E. Norheim mentions that there has been a strong demand for transaction services since significant restructuring processes are taking place in Norway. The active companies in this industry have faced many important challenges when trying to adapt to the situation; there has been significant uncertainty surrounding the evolution of the market and the fluctuation of oil and gas prices. “This is the third year of the down-cycle, but it seems to be flattening out now. EY aims to continue assisting the industry and its companies to adapt to day-to-day business with a strong focus on cost optimization,” says E. Norheim.
The down-cycle of the industry largely impacted companies that have significant asset bases as part of their service delivery, such as offshore mobile rig companies and offshore supply vessel companies. “They have had a really tough time given the fact that they have significant capital in their assets. The market has shrunk considerably, turning their situation sour which can be clearly seen in their balance sheets,” says E. Norheim. On the other hand, he stresses the fact that operating in Norway has many advantages, one of them being host to a top-class supply industry. “The supply cluster has strong engineering capabilities that help overcome operational challenges and the competence to develop creative technologies to reduce the cost base,” says E. Norheim. In the course of 10 years, the Norwegian market has experienced a significant inflow of exploration and production players and the Norwegian tax regime has proven to be a facilitator for growth. “Even though this trend has been altered due to the market changes in 2014, the most important feature of the Norwegian tax regime is its stability,” says E. Norheim.
EY focuses on maintaining in-depth industry knowledge and teams with strong technical capabilities in their business consultancy practices in order to help companies overcome their financial challenges. “Our focus on the oil and gas sector has provided us with operational experience and analytical capabilities, allowing us to advise and contribute to strategic processes in addition to our usual services,” says E. Norheim.
The firm operates according to the slogan “Building a better working world” and applies it in its daily activities. EY provides tax and transaction services. “We audit companies to make certain that investors can safely participate and place confidence in the statutory accounts, books, etc.,” says E. Norheim. In addition, EY offers consulting services to help achieve efficiency in business and build foundations for growth. “EY’s value proposition is to ensure that professional service firms play their role by sharing and spreading best practices and providing in-house expertise,” states E. Norheim. The firm aims to further strengthen the relationship with their clients and to provide better solutions to address current and future challenges with dynamic teams. and to look at the industry from the clients’ perspective to provide services that fit their needs. “It is essential to find balance to ensure that everyone wins; Norway has found this balance, we have proven that we have a globally competitive fiscal regime,” he concludes. Despite the numerous challenges in the present, the Norwegian oil and gas sector keeps its reputation as a competitive, innovative, and advantageous market in the eyes of EY.