The North Sea was dealt a double blow yesterday as oil giants Shell and Taqa revealed hundreds of job losses in the basin.
Anglo-Dutch giant Shell revealed it was axing 250 jobs from its 2,400-strong North Sea workforce, and entering into consultation over the introduction of new shifts which could see staff moving to a three-on, three-off pattern.
Shell confirmed the job losses were in addition to the 250 North Sea roles it announced it was cutting last year as the oil price started to decline.
The firm yesterday said the latest round of redundancies and the proposed shift changes were “part of a range of initiatives Shell has been pursuing to manage costs and improve the competitive performance of its operations around the world”.
Staff and agency contractors based in Aberdeen and on installations in the North Sea were informed of the plans during a meeting yesterday, and the firm has entered into a statutory period of consultation with affected workers.
The current shift system is two weeks on, two weeks off, two weeks on, four weeks off, but many North Sea operators are pushing for change.
“The North Sea has been a challenging operating environment for some time,” Paul Goodfellow, Shell’s upstream vice-president for the UK and Ireland, said.
“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.”
The GMB union yesterday said it remained “miles apart” from Shell after talks on pay, staffing levels, changes to rosters and holiday arrangements.
In a separate move, Taqa the trading brand of the Abu Dhabi National Energy Company PJSC also announced it was cutting 100 jobs in the North Sea.
The firm said it had to cut back its operational base in the UK to secure a sustainable future for the business.
“Taqa’s UK North Sea business, along with the industry as a whole, is operating in a challenging environment,” the firm said in a statement.
“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.
“The impact of these changes will predominately be on contractors and consultants.
“We are currently proposing a reduction of around 100 onshore positions, but the process will take a number of weeks and involve consultation with our workforce.
“Our workforce are fully informed on the proposed changes and we will work to support and guide them through the process.”
Chancellor George Osborne announced major changes to the North Sea tax regime in his Budget last week in response to difficulties facing the UK oil and gas sector.
Petroleum revenue tax and the supplementary charge are both being cut.