Sector News

BP announces North Sea job cuts amid oil slump

January 15, 2015
News
BP has announced around 300 job cuts in its North Sea operations in the latest sign of falling oil prices hitting Britain’s petroleum industry.
The company, which employs 3,500 staff in the North Sea, briefed employees in Aberdeen today about the cuts.
 
Trevor Garlick, regional president for BP North Sea said: “Given the well-documented challenges of operating in this maturing region and in toughening market conditions, we are taking specific steps to ensure our business remains competitive and robust, and we are aligning with the wider industry.”
“Whilst our primary focus will be on improving efficiencies and on simplifying the way we work, an inevitable outcome of this will be an impact on headcount and we expect a reduction of around 200 onshore staff and 100 contractor roles. We have spoken to staff and will work with those affected over the coming months,” he added.
 
In December, BP said that it was looking at making savings from restructuring of around $1bn over the next five quarters but the recent fall in oil prices has brought added focus to that, said the source.
 
Sir Ian Wood – who recently completed a review of the UK offshore oil industry for the Government – has said that 15,000 jobs could be lost in the North Sea as a consequence of falling oil prices. This week the Telegraph revealed that Tullow Oil would be announcing cuts by the end of the first quarter.
Brent oil has fallen by about 60pc since June and analysts are concerned that the industry will have to make deep cuts in headcount and project spending to cope with a prolonged period of crude trading at under $50 per barrel.
 
The Chancellor, George Osborne, has ordered the Treasury to explore providing additional tax relief for companies working offshore in the North Sea. Aberdeen’s economy depends on the health of the oil and gas industry, which formed a key part of the independence campaign of Scottish nationalist Alex Salmond last year.
 
Meanwhile companies are cutting back capital expenditure. Royal Dutch Shell, the UK’s biggest oil company, said yesterday that it had decided not to press ahead with a $6.5bn plan to build a petrochemicals plant in Qatar.
 
By Andrew Critchlow
 

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