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Energy Voice: Shell cuts contractor rates

October 13, 2014
Shell has confirmed plans to slash its North Sea contractor rates.
The pay cuts will come into effect at the beginning of next month.
A Shell spokeswoman said: “Following a review of our use of agency staff, Shell is reducing the rates paid in respect of agency staff in order to align with industry benchmarks and manage cost pressures.
“This is one of a number of measures we will implement to manage costs and improve the competitive performance of the business, in accordance with our corporate strategy.
“It will come into effect from November 1, 2014.”
The firm is said to be cutting rates for direct contractors by 15% and cutting rates for agency contractors by 10%.
The industry giant is the first operator in an emerging line-up of major oil and gas players to shave pay-outs.
Petrofac, Wood Group and Amec have all reduced contractor rates by 10% in a bid to flatten rising costs.
The confirmation is the second pullback from Shell this year.
Energy Voice previously revealed how the firm plans to shed 250 jobs from its Aberdeen office over the next year.
It’s thought the difficult combination of increased lifting costs and decreased oil prices has forced the industry’s hand into a raft of cost cutting measures.
Wood Group PSN was the first firm to announce rate cuts. The firm’s chief executive sent letters to 1,750 onshore and offshore contractors warning them about the reduction in pay earlier this year. Petrofac soon followed suit.
By Rita Brown
Source: Energy Voice

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