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Why Shell Is Cutting Jobs In The North Sea

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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.

As reported by the Financial Times, Shell has indicated that the decision was made in line with its cost cutting strategies. The move is also expected to improve the Den Haag based company’s competitive performance and operations around the world.

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.

As reported by the Financial Times, Shell has indicated that the decision was made in line with its cost cutting strategies. The move is also expected to improve the Den Haag based company’s competitive performance and operations around the world.

Shell has also indicated that it plans to move towards a more even time rota. This would mean that the company would try to adopt a three weeks on, three weeks off pattern compared to the traditional two weeks on, two to three weeks off. The Shell will forward the suggestion to the staff committee for further discussion.

Meanwhile, the trade unions are opposing the decision to change the shift patterns. Trade unions, Unite and GMB are calling on their members to strike against the change in shift patterns. As reported by Reuters, the regional organizer at Unite, John Taylor said that if the change in the shift policy is adopted, it would spread like cancer in the North Sea. This for this reason that the Union has opposed the decision.

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