Shell to inject $4bn into North Sea despite spending cuts

Shell is planning 'significant investment' in the North Sea. Picture: Hemedia

The investment drive will be rolled out between this year and 2018 and is understood to be line with its previous expenditure in the region.

The energy giant announced on Tuesday that it would scale back global investment and pinpoint further savings as it grapples with lower oil prices.

Energy giant Shell to slash spending by a third

Paul Goodfellow, Shell’s vice-president for upstream in UK and Ireland, said its plans would “include significant investments with our partners west of Shetland in the Clair and Schiehallion projects in which Shell has a 28 per cent and 55 per cent share respectively.”

He added: “Shell continues to have a substantial business in the North Sea with 65 interests in North Sea fields, 33 North Sea platforms and two floating production storage and offloading (FPSO) vessels – one operated and one operated on our behalf.”

The investment pledge comes after fresh data showed jobs supported by the UK oil and gas sector are set to fall by more than 120,000 by the end of this year, according to industry body Oil & Gas UK.

Shell, which sealed a $54bn takeover of BG Group in February, said earlier this week that spending will be slashed by 35 per cent over the next four years.

It also said last month that it would axe a further 2,200 jobs from its global workforce, meaning 12,500 staff and contractor roles would be lost between the start of 2015 and the end of this year, up from its previous target of 10,300. This will include 475 jobs at its UK and Ireland upstream business.

Goodfellow added: “Shell’s 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.

“That is why we recently announced that Shell will reduce the size of the organisation supporting our UK and Ireland upstream business by around 475 people. Following these changes, Shell will remain a key employer in the north-east of Scotland with around 1,700 employees.”