Shell announce 250 staff and agency contractor reductions

Shell news
Shell news

Oil major Shell will reduce the number of staff and agency contractors working on its North Sea operations by 250.

The company said it would be making a number of changes to both staffing numbers and shift patterns.

It is not yet clear how many staff and contractors specifically will be affected.

The move is in line with a number of companies, including BP, who announced 300 job losses earlier this year.

In August last year the company made a previous reduction of 250.

Staff have been informed of the changes to shift patterns at a meeting held today, which could also include a move to a “three on, three off” work pattern.

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 at the integrity of our assets. ”

The company said that the company will now begin a period of staff engagement.

Shell’s North Sea operations are currently supported by around 2,400 staff and agency contractors.

Following the announcement of further job losses at Shell, Shadow Energy Minister and North East Labour MSP Lewis Macdonald is calling on Scottish Ministers to take urgent action to respond to the deeper crisis now facing the oil industry.

Reacting to the announcement, Mike Tholen, Oil & Gas UK’s economics director, said: “With up to 23 billion barrels of oil and gas still to be recovered from the UK continental shelf (UKCS), the province offers vast potential.

“However its attractiveness as a destination for investment has been severely curtailed in recent years by rising costs, an onerous tax regime and under-resourced regulation, worsened by the drop in oil price.

“The new Oil and Gas Authority is progressing apace and the Budget announcement last week laid the foundations for the regeneration of the UK North Sea.

“As we said at the time, however, it is crucial that the industry itself now builds on this by delivering the cost and efficiency improvements required to secure its competitiveness.

“While these are tough decisions to take given the impact on people, the measures are being taken by many companies and will allow the UK to benefit in the long-term from a boost to energy security, hundreds of thousands of highly skilled jobs and billions of pounds worth of supply chain exports.”

The GMB union said it was “miles apart” from the company after talks on pay, staffing levels, changes to rosters and holiday arrangements.

National officer David Hulse said the union will get the results tomorrow of a consultative ballot among members, adding: “Unilateral action by employers will make matters worse.”

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.

He said Petroleum Revenue Tax would be cut from 50% to 35% to support continued production in older fields.

The existing supplementary charge for oil companies will also be cut from 30% to 20%, backdated to January.

Meanwhile Unite’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 £1.3 billion 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.

“The only barriers to the industry’s ongoing attacks are the offshore trades unions but we need our politicians to wake up to the reality of what’s happening in the North Sea – it’s a growing scandal which could turn into a catastrophe.”

Lewis Macdonald said: “The announcement of a second round of job cuts at Shell and Taqa is a blow to the North East and to oil and gas workers who now face an uncertain future.
“Changes are also being imposed on the terns and conditions of those working offshore.

“While some of those losing their jobs in the North Sea will find work in other oil provinces around the world, the reality is that for many older workers and those with families, this is simply not an option.

“This deepening crisis stresses the urgency of infrastructure investment in and around Aberdeen. It is critical that the Scottish Government takes action to anchor the UK oil industry in the North East.

“Ministers need to support transport and housing projects, as well as developing skills, if we are to ensure the long-term survival of the North East oil industry.

“We have always said that changes to the tax regime would not be enough. It is time that Ministers stepped up and took action to project jobs and develop infrastructure in Aberdeen.”