China Oilfield Services Limited (COSL) saw its profit slashed significantly for the financial year over 2014 due mainly to huge impairment charges on the back of a weak offshore oil and gas market.

Net profit for last year was recorded at RMB1.07bn ($165.5m), a plunge of 85.7% from the gain of RMB7.49bn in 2014.

Revenue for 2015 also declined by 29.9% year-on-year to RMB23.65bn on lower contributions from the group’s drilling services, well services, marine support services, and geophysical and surveying services.

The earnings were hit by a RMB1.2bn impairment charges on goodwill, property, plant and equipment, in view of the unfavourable future prospects of the group’s businesses on forecasted low utilisation rate and charter rates of drilling rigs.

“The company faces a severe business environment and our operation faces further pressure. It is expected that the revenue and operating profit for 2016 will decrease significantly as compared with 2015,” COSL said.

The company observed that global oil prices will remain low in the first half of 2016 and may slightly increase in the second half. “With such uncertainties of the decline of international oil and gas market, oilfield services industry will face the most rigorous challenges over the latest several years.”

Meanwhile, COSL subsidiary COSL Drilling Europe announced a decision earlier to axe 230 staffdue to Statoil terminating services for one of its mobile drilling rigs COSLInnovator in the Troll Field of Norway.

Statoil, however, has resumed operations for another COSL rig COSLPromoter, also working in Troll Field, after COSL Drilling Europe implemented the necessary measures to meet Statoil’s demands.