Here’s Why Royal Dutch Shell Is Cutting Jobs In The North Sea
By: MICHEAL KAUFMAN: Published: Mar 26, 2015 at 1:13 pm EST
Royal Dutch Shell plc. (ADR) (NYSE:RDS.A) has announced to cut 250 jobs in the UK North Sea region. The move comes ahead of more than 50% decline in crude oil prices. As a result, life in the exploration and production companies has become difficult. The job cut announced by Shell comes just a week after the announcement of the treasury to offer tax cuts in order to stimulate growth in the industry.
The North Sea oil and gas sector holds great value to the state. The sector employs over 400,000 people and is estimated to have a worth around $7.47 billion. Despite the massive size of the sector, investment activity is slow. This is due to the high costs of production faced by the energy companies due to higher taxes and lower crude oil prices. Thus the tax cut by Britain was aimed at promoting investment in the sector.