Falling oil prices leads to job losses at BP

Press Association
Petrol Prices At U.K. Gas Stations As Price Of Oil Continues To Fall
Petrol Prices At U.K. Gas Stations As Price Of Oil Continues To Fall

Energy giant BP has announced hundreds of job losses amid the plunging price of oil, sparking warnings of further cuts and calls for government action.

The firm said it expects to shed 200 onshore staff, while 100 contractors' posts will also be axed, which unions said was a "devastating blow" to the industry.

Holyrood's Energy Minister Fergus Ewing demanded action from the UK Government, saying the employment threat from the oil price fall has produced the the most serious jobs situation Scotland has faced "in living memory".

Energy Secretary Ed Davey, who was visiting Aberdeen to talk to leading figures in the North Sea oil and gas sector, said he had "huge sympathy" with the workers losing their jobs.

He told the Press Association he was meeting industry chiefs to see what could be done to maintain jobs in the sector and help anyone being laid off.

"We want to do everything we can to minimise any impact. The North Sea is crucial to Britain's energy industry and is a vital part of our economy."

Unions fear today's news is the first in a series of announcements from oil firms as a result of cheaper prices.

Trevor Garlick, regional president for BP North Sea, said: "We are committed to the North Sea and see a long- term future for our business here. However, given the well-documented challenges of operating in this maturing region and in toughening market conditions, we are taking specific steps to ensure our business remains competitive and robust, and we are aligning with the wider industry.

"Whilst our primary focus will be on improving efficiencies and on simplifying the way we work, an inevitable outcome of this will be an impact on headcount and we expect a reduction of around 200 staff and 100 contractor roles. We have spoken to staff and will work with those affected over the coming months."

Mick Cash, general secretary of the Rail, Maritime and Transport (RMT) union, said: "The announcement from BP is a devastating blow to hundreds of workers in the UK energy industry and we are being warned that there is much worse to come.

"RMT believes that the industry is making offshore workers carry the can for their failure to plan for lean times such as these. Instead they have gone for a short-term slash-and-burn approach that will have long-term implications for the future of the entire industry and the security of the UK's energy supplies.

"RMT, along with our sister unions, is meeting with Oil and Gas UK tomorrow, where we will be pushing for a halt to the job cuts programme and an emergency package of measures to stave off the destruction of both jobs and infrastructure.

"We are also continuing to lobby politicians for incentives to allow exploration, maintenance, safety and engineering development works to take place during this emergency period for the industry."

With Chancellor George Osborne due to unveil his final Budget in March before the general election, Mr Davey suggested extra help could be made available for the North Sea.

Mr Ewing said the two Governments needed to "put the politics aside" and get a new tax deal implemented for the North Sea "because it will save jobs".

He insisted action was needed before the Budget, warning that "unless there is swift action to introduce that tax package, then investment decisions will be made between now and March prematurely to decommission fields which should carry on in production for many years, if not decades, to come".

Scotland's First Minister Nicola Sturgeon was in Aberdeen yesterday where she announced a new task force to help address the threat to jobs that comes from the drop in oil prices.

Mr Ewing told BBC Radio Scotland's Good Morning Scotland: "Our thoughts are with all the people in the north east of Scotland in particular who face job losses at this time. That is why the First Minister announced yesterday the formation of a task force."

The Scottish Government has also been pressing Westminster to make a series of tax changes to help the industry, including the introduction of an investment allowance, tax credits for exploration and a reversal of the previous hike in the supplementary charge.

These measures combined could boost investment in the North Sea by some £40 billion and support more than 30,000 jobs, according to Mr Ewing.

He said: "We set out our proposals last week for an investment allowance, exploration tax credit to bring up the woeful level of exploration at present and also a removal of the 12% hike in the supplementary charge on a timed basis.

Mr Davey said the Government had already been working on long-term plans with the oil and gas industry to make it as competitive as possible.

David Hulse, national officer of the GMB union, said: "We are asking contractors and clients in the North Sea oil and gas industry to hold off from making fundamental decisions affecting the long-term future of this industry until we have all had a proper chance to assess the current situation and what needs to be done, including action by UK and Scottish Governments.

"We do not want decisions made on the hoof that could have long-term implications."

Meanwhile, energy company Total has begun production at a North Sea project which could supply the equivalent of 40,000 barrels of oil per day.

Bosses said the second phase of the West Franklin field, about 150 miles west (241km) of Aberdeen, has "significant reserves" and also promised new "exploration opportunities".

Pat Rafferty, the Unite union's Scottish secretary, said: "This latest announcement on job cuts from BP is part of a deeply worrying trend across an industry which is central to the Scottish and wider UK economy.

"People are paying with their livelihoods because of a failure by the oil majors and the Westminster Government to prepare for a fall in oil prices. They've made hay while the sun shone, but put aside little for a rainy day.

"Over time oil prices will recover. There is a real danger that knee-jerk job cuts will undermine health and safety and the future of the industry in the long term.

"The UK Government needs to intervene urgently to support the industry and the task forces set up by the Scottish Government and local authority in Aberdeen need to turn words into urgent action."

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