Shell cuts hundreds of jobs in North Sea to manage increasing costs

Shell UK announced that it will cut 250 jobs in its North Sea operations this year.

The move is part of the oil giant’s plan to manage increasing costs.

Agency contractors and staff based in Aberdeen and offshore were notified about the cuts on Thursday.

Last August the company also announced 250 cuts, increasing the total number of job cuts in region to 500.

North Sea oil platform

A number of other major North Sea operators have also announced job cuts.

The company said:

“The measures are 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 today.”

North Sea has been “a challenging operating environment”

Paul Goodfellow, Shell’s upstream vice president for the UK and Ireland, commented on Shell’s plans:

“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.”

He added: “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.”

Energy conglomerate Taqa also cutting jobs in North Sea

Shell isn’t the only company to announce North Sea redundancies.

Taqa, the Abu Dhabi-listed energy and water conglomerate, similarly announced plans to shed 100 jobs in its North Sea operations, citing “challenging conditions.”

Positions in consulting and contracting will be affected by the changes.

A spokesperson 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.

“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.”

North Sea operators are having to cut staff to manage costs

Britain’s North Sea oil and gas sector employs more than 400,000 people and is worth around 5 billion pounds a year.

However, companies operating in the sector have been hit hard by lacklustre investment activity, falling oil prices, and high taxes.

There have been a number of other North Sea operators that have recently announced redundancies in the region, including oil giants BP, Talisman Sinopec, Chevron and ConocoPhillips.