OSLO • When Mr Luke Rickert first started as an engineer at Aker Solutions, a Norwegian oil services provider, his team of 24 had people from 15 different countries.
People from the United States to India, Brazil, Portugal and dozens of other nations came to fill a shortage of skilled workers in Norway's booming petroleum industry. They were lured by US$20,000 (S$28,250) relocation packages, high salaries and the nation's fabled home and work balance. They helped Norway turn oil into cash that created the world's largest sovereign wealth fund.
Now, with crude prices low and Norway facing the biggest drop in oil investments since 2000, the country risks being drained of that expertise. "They're going to lose a lot of trained, experienced engineers," Mr Rickert said in an interview last week.
The 39-year-old Seattle native was among the 500 job cuts Aker Solutions announced last week. Many of those are foreigners on specialist visas requiring secure jobs for renewal, and who do not qualify for unemployment benefits. "That means we're all just going to leave."
Falling investments and a 52 per cent drop in the price of Brent crude to below US$50 a barrel in the last year has left Norway trying to dodge a recession. The number of notifications of dismissals and layoffs has grown to 36,000 in the past year, including more than 20,000 just in the oil sector, according to the Norwegian Labour and Welfare Administration. That is the highest since at least 2009.
While unemployment remains enviably low at 4.5 per cent, it is the highest in at least 11 years. But that figure will not provide the most accurate reading of jobs lost as foreigners leave the country. Growth is already stagnating. Norway's mainland economy, which excludes oil, gas and shipping, grew 0.2 per cent in the second quarter.
The central bank in June cut rates to a record low and signalled as much as a 70 per cent chance of another reduction this autumn. The Norwegian krone has plunged 30 per cent against the US dollar over the past 12 months and declined 12 per cent versus the euro.
"The oil industry is no longer active," said Mr Frank Bersvendsen, head of Jobsconnect in Norway, a recruitment agency.
During the half-decade-long petroleum boom, Jobsconnect held fairs in countries including Iceland and Portugal, hiring as many as 15 people at a time to work in Norway, he said. That "importing" of workers to fill a shortage in the oil sector has come to a halt, he said.
Net migration has dropped 20 per cent so far this year after falling the same amount last year, according to Statistics Norway. The central bank sees it plunging 36 per cent by 2018, from a peak in 2012, it said in its June monetary policy report. That "will reduce the economy's growth potential", Norges Bank said.
The nation's reliance on oil has increased since 2000, with the number of oil-related jobs doubling to 300,000, according to the central bank. More than half of those were filled by workers from outside of Norway, it said.
Norway now relies on petroleum for half its exports and for one in nine jobs. Prime Minister Erna Solberg is ready to tap the nation's oil wealth to stop the economy haemorrhaging jobs. She has promised a budget proposal for next year that includes a "sharp increase" in funding for measures to create new jobs for unemployed oil engineers, according to a local media report.
Norway is also counting on its biggest offshore project in decades to buoy the industry. The Johan Sverdrup field in the North Sea, which holds as much as 2.9 billion barrels of oil, is due to start output in 2019.
People in Norway, Europe's second-richest nation per capita after Luxembourg, are paid US$60,000 a year on average and have some of the developed world's shortest work days, according to Statistics Norway and data from the Organisation for Economic Cooperation and Development.
With a population of 5.2 million, residents get publicly funded healthcare, practically free education and as much as 14 months paid parental leave. But taxes are high.
"I had planned to stay for six months, but I liked it here," said Mr Giles Eaton, who moved in 2012 and is a consultant engineer with Aker Solutions in Oslo. The Briton, who has two children, said the country's family-friendly lifestyle was a key factor in staying.
As companies adjusted to low oil prices, he has had to accept a 10 per cent pay cut and is now "apprehensive" about what will happen when his contract expires in January. "It's looking quite bleak."
Norway offers generous unemployment benefits, which are meant to help the nation fight off a slowdown, but those do not apply to everyone.
Mr Rickert has a specialist labour visa and Mr Eaton is registered in Britain's national insurance scheme. That means they miss out on payments of as much as 62 per cent of gross income for up to two years. "This just never crossed my mind - that I could be in this position," Mr Rickert said. "It makes it very easy to leave." BLOOMBERG