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‘Difficult time’ for oil workers as Shell workforce is slashed

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By GREG CHRISTISONPUBLISHED: 22:22, Wed, May 25, 2016 

The move, announced yesterday, is a result of the firm’s £35billion merger with the BG Group and the prolonged slump in oil prices. 

A total of 475 positions will be lost from the company’s UK and Ireland upstream business, which deals primarily with exploration, by the end of the year. 

All job losses are expected to affect Scotland – home to around 2,200 Shell employees – with most coming from the firm’s Aberdeen headquarters. Around 40 offshore posts will be cut and there will also be losses at St Fergus Gas Terminal, in Aberdeenshire, and the firm’s plant at Mossmorran, in Fife.

The latest cuts – a total of 2,200 worldwide – mean Shell are predicting to lay off 12,500 staff between 2015 and the end of this year.

It comes just three months after the firm posted its steepest fall in annual earnings for 13 years – from $19bn in 2014 to $3.8bn last year. 

Shell’s UK and Ireland vice-president Paul Goodfellow addressed staff in Aberdeen ahead of the announcement. 

Speaking yesterday, he said: “Despite the improvements that we have made to our business, current market conditions remain challenging. 

“Our integration with BG provides an opportunity to accelerate our performance in this ‘lower for longer’ environment.

“We need to reduce our cost base, improve production efficiency and have an organisation that best fits our combined portfolio and business plans.. 

“As a result, we will reduce the size of the organisation supporting our UK and Ireland Upstream business by around 475 people.” 

Mr Goodfellow added that Shell would remain a key employer in the northeast of Scotland with around 1,700 employees. 

Scottish Secretary David Mundell said the losses marked a “difficult time for the workforce and their families in the northeast of Scotland”.

He said: “The UK Government will do all it can to support the workers, and the industry as a whole.

“We have introduced a significant package of tax measures, worth £2.3 billion, to ensure the UK remains an attractive destination for investment.

“To support Aberdeen directly, we have agreed with the Scottish Government and local authorities a £250 million City Deal for Aberdeen and Aberdeenshire.” 

Mr Mundell will next week travel to Texas, United States, to promote the skills of North Sea oil and gas workers to investors and stakeholders. 

Meanwhile, Energy Minister Paul Wheelhouse said the Scottish Government “stands ready to do all it can” to assist those affected by redundancies. 

He added: “Our Energy Jobs Taskforce is co-ordinating action and laying a solid foundation for a truly modernised North Sea oil industry and has helped support more than 2,500 individuals and 100 employers through the current downturn. 

“And the Scottish Government has also provided direct support for the sector, which includes a £12 million skills fund to support individuals’ transition to other employment through additional training or education, and Scottish Enterprise have allocated a further £12.5 million for innovation and to support new technologies.” 

At the end of 2015, Shell employed around 90,000 people globally and the BG Group employed around 4,600. 

Following the merger in February, Shell announced a number of office closures in Aberdeen, Reading and Manchester.

The cuts follow a severe drop in Brent crude prices from more than $110 per barrel in the summer of 2014 to below $50 per barrel today. The situation has been exacerbated by the refusal of Middle Eastern countries to cut production – leading to a glut of cheap oil in an already oversupplied market. 

It has forced a number of energy firms and their suppliers to slash investment and jobs in a bid to balance the books.


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