Baker Hughes is set to shut its coiled tubing department, according to numerous sources with knowledge of the development, as the energy services sector continues to reel from the impacts of reduced demand due to the Covid-19 pandemic.

One source told Upstream that as many as 50 employees will be laid off, although others said it will likely be about 40 employees.

The reason behind the move is the poor market conditions in Norway for well intervention, which has led to low demand for coil tubing, sources said.

A Baker Hughes spokesperson confirmed that the company is restructuring in Norway but declined to discuss details about the process.

"We are facing unprecedented market conditions, requiring us to reduce costs and restructure parts of our business," the spokesperson said.

"Baker Hughes Norway are in discussions with employees and unions, and we make these decisions with the utmost sensitivity to the impact on our employees."

According to Upstream’s sources, Baker Hughes will concentrate its department for coiled tubing in Aberdeen, UK. However, this has not been confirmed by Baker Hughes.

The spokesperson said that it has done its utmost to avoid large reductions in staff.

"We do not take these decisions lightly and when it comes to reductions in headcount, we exhaust other discretionary cost reductions before taking these decisions," the spokesperson said.

Coiled tubing consists of a lengthy metal pipe spooled on a large reel. It is used for intervention in oil and gas wells and sometimes as production tubing in depleted gas wells.

Coiled tubing is often used to carry out operations similar to wirelining.