Shell latest oil firm to cut North Sea jobs

SCOTLAND’s oil capital was dealt a fresh blow yesterday as energy giants Shell and Taqa announced plans to axe more than 300 North Sea jobs.

Oil rigBLOOMBERG

Shell and Taqa will axe jobs due to plunging oil prices

The firms blamed plunging oil prices and rising costs but the move comes just days after Chancellor George Osborne threw the industry a £1.3billion lifeline in his Budget.

Shell UK said it would cut 250 posts from its North Sea operations and change offshore shift patterns in a cost-cutting drive.

Staff and agency contractors based in Aberdeen and on platforms were told of the plans at a meeting yesterday.

Earlier, Taqa said it planned to cut about 100 jobs because of the “challenging” time for the industry.

Paul Goodfellow, Shell’s Upstream Vice President for the UK and Ireland, said: “The North Sea has been a challenging operating environment for some time.

"Reforms to the fiscal regime announced in the Budget are a step in the right direction, but the industry must redouble its efforts to tackle costs and improve profitability if the North Sea is to continue to attract investment.

“Current market conditions make it even more important that we ensure our business is competitive.

"Changes are vital if it is to be sustainable.

"They will be implemented without compromising our commitment to the safety of our people and the integrity of our assets.”

Regrettably it is necessary for us to scale back the number of people working with us

Taqa spokeswoman

The cuts are in addition to 250 redundancies in Aberdeen announced by the company last August, while BP has since axed 300 jobs.

Chevron of the US and Statoil of Norway have also cut their staff in the UK.

There are fears that as many as 35,000 oil-related jobs in the UK could go due to the plummet in the price of oil, now hovering at just below 60 dollars a barrel.

Taqa confirmed staff consultations are also underway.

A spokeswoman said: “Taqa’s UK North Sea business, along with the industry as a whole, is operating in a challenging environment.

“As part of our focus to ensure Taqa’s sustainable future in the UK, regrettably it is necessary for us to scale back the number of people working with us.”

Among the measures set out by Mr Osborne is a cut in the supplementary charge on oil industry companies’ profits from 30 per cent to 20 per cent, backdated to January.

The policy, widely welcomed by the industry, effectively reverses the hike in the 2011 Budget when oil prices were much higher.

Mr Osborne also said he would also cut petroleum revenue tax from 50 per cent to 35 per cent next year.

The Unite trade union’s Scottish secretary, Pat Rafferty, said: “There is no doubt we are witnessing a concerted effort by the offshore industry to impose a race to the bottom on jobs, terms, conditions and, ultimately, safety across the North Sea.

“Only last week the industry got everything it wanted from the Chancellor in the form of a £1.3billion tax break, which industry voices claimed was necessary to boost growth and sustainability.

“Instead the cut and gut of ordinary offshore workers’ livelihoods and terms and conditions goes unchallenged while executive pay across oil company majors goes through the roof.”

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