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North Sea oil companies announce restructuring

Article By: ,  Financial Analyst
March 27, 2015 11:26 AM

The woes for North Sea oil operations continue as two major companies have announced significant restructuring plans.

Shell UK and Taqa both stated that they will be cutting jobs in the region to help reduce costs. The former said that it is reducing its North Sea workforce by 250 and change offshore shift patterns. Taqa also announced job cuts with around 100 set to be lost due to the "challenging" time facing the industry.

The company went on to say that of the 100 jobs due to be lost they will mainly come from contractors and consultants working in onshore positions. Shell and Taqa join the likes of BP and Chevron that have been forced to cut jobs in its operations and a continuing downturn in the UK oil sector.

Paul Goodfellow, Shell's upstream vice president for the UK and Ireland, said: "The North Sea has been a challenging operating environment for some time.

"Reforms to the fiscal regime announced in the budget are a step in the right direction, but the industry must redouble its efforts to tackle costs and improve profitability if the North Sea is to continue to attract investment."

The announcement resulted in a 1.13 per cent drop in Shell's share price as 09:27 GMT on Friday (March 27th).

Challenging conditions

The UK's oil and gas sector has faced some considerable challenges in recent months. The price of oil has been tumbling since the summer of 2014 and does not seem to be making any form of recovery.

There has been recent optimism provided by a report by the Bank of Scotland which said that firms would be looking to embark on recruitment drives in the coming years. Within two years, the research found that around 8,000 jobs could be generated but the announcements from Shell and Taqa have put somewhat of a dampener on the report.

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