Ministers pledge support as Shell axe 475 North Sea oil jobs

Picture: HeMedia

Picture: HeMedia

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SCOTLAND’S oil and gas sector is reeling from yet another hammer blow after Shell announced plans to slash its UK workforce by a fifth.

The oil giant said it will cut 475 people from its UK and Ireland business. All the jobs are understood to be based in Aberdeen and the north-east.

It is time for the UK government to recognise that the north-east of Scotland deserves better than the support we are getting

Callum McCaig

Shell announced it will lose 2,200 jobs from its workforce globally as it grapples with lower oil prices, meaning 12,500 staff and contractor roles will be lost between the start of 2015 and the end of this year.

The company insists it will “remain a key employer in the north-east of Scotland” with about 1,700 employees.

But Unite warned that if the current rate of job losses in the oil and gas sector continues – with 150 positions going every day since the barrel price downturn – there will be no viable North Sea oil industry within a decade.

The union’s John Boland said: “We have very real fears that Shell cannot continue to operate safely offshore if it keeps shedding the workers tasked with ensuring our oil industry is safe and sustainable.”

Paul Goodfellow, Shell’s vice president for UK and Ireland, addressed staff in Aberdeen yesterday.

Afterwards, he said: “Our integration with [oil and gas company] 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.”

Both the Scottish and UK governments expressed concern at the scale of the cuts and promised help for workers facing redundancy.

• READ MORE: North Sea oil industry will recover in 5 years - Ian Wood

Scottish energy minister Paul Wheelhouse said: “The Scottish Government has demonstrated through practical action that we are fully committed to working with the oil and gas industry during these challenging times.

“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 £12.5m for innovation and to support new technologies.”

Scottish Secretary David Mundell 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 £250m City Deal for Aberdeen and Aberdeenshire.”

Mr Wheelhouse pledged to visit Aberdeenshire at the earliest opportunity, while Mr Mundell said he will promote Scottish skills, expertise and innovation during a visit to US oil state Texas next week.

Shell’s first-quarter profits plummeted 58 per cent to 1.6 billion US dollars (£1.1bn) at the beginning of this month, as the falling oil price continued to hammer the sector.

The price of oil hit a seven-month high on Tuesday of $49.27 a barrel, but is still well below its peak in the summer of 2014 of about $115 a barrel.

Callum McCaig, SNP MP for Aberdeen South, said: “It is disappointing to see further job losses to the oil and gas sector especially when the vast majority of these cuts will impact Aberdeen the hardest.

“It is time for the UK government to recognise that the north-east of Scotland deserves better than the support we are getting. By contrast, the Scottish Government is investing £379m to support Aberdeen as one of the world’s leading cities for investment and business, including the Transition Training Fund.”

Maureen Watt, SNP MSP for Aberdeen South and North Kincardine, said: “In the coming days I will be writing to Shell to ask for further details on the job losses, and appealing to my constituents who may be affected to contact me. I will of course also seek to speak to my colleagues.”

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