After BP announced the purge, which will occur over two years, the Aberdeen City Council’s Councillor Jenny Laing said her local government was working to help “anchor” the city’s oil and gas supply chain.
While Laing called BP’s move “disappointing”, she was comforted somewhat by BP’s voiced renewed commitment to investing long-term in the North Sea, even as Morgan Stanley this week said that a rapid appreciation of the US dollar could send Brent oil to $US20/barrel.
BP’s North Sea head count cull amounts to a 20% reduction, with the UK super-major attributed to “toughening market conditions”
“We want to simplify structure and reduce costs without compromising safety,” a company spokesman said.
“Globally, we expect the headcount in upstream to be below 20,000 by the end of the year.
The job losses amount to around 5% of BP's total global workforce of 80,000. It currently employs about 3000 in the UK.
Oil & Gas UK CEO Deirdre Michie said only last week that while 2015 production from the UK North Sea recorded its biggest production lift in over 15 years, “we will continue to see job losses as we move into 2016”
“As a council, we are working closely with the UK and Scottish governments, our colleagues in Aberdeenshire Council and the private sector towards securing a City Region Deal for the north-east,” Laing said.
“We believe that can help to anchor the oil and gas supply chain here in the Aberdeen area for decades to come while diversifying the local economy into emerging sectors including renewables, tourism, food and drink and life sciences.”
The news comes as troubled Brazilian oiler Petrobras announced it would cut investment by $US32 billion – 25% – over the next four years, which will be its third cut in six months.
All this came after some good news, as contractors earlier this week accepted improvements in terms and conditions from the Offshore Contractors Association.
While OCA has not commented publicly, Unite, the UK’s biggest offshore trade union, announced this week that it had accepted the improvements but repeated its call for the industry to end its year-long imposition of cuts.
The union said the agreement ended a prolonged dispute which previously saw workers reject efforts by some OCA employers to impose cuts to jobs, terms and conditions without consultation following the slump in oil price.
Unite regional officer Tommy Campbell said the conciliation demonstrated that, “even in times of crisis the most effective way forward is for the industry to work with trade unions through proper consultation channels under a collective agreement”.
“What our oil and gas sector urgently requires now is a genuine co-operation between government, industry and the offshore trade unions to respond to this on-going crisis, alleviating the pressure on the industry while protecting employment rights,” Campbell added.
“This is the only way we can begin to build a safe and sustained recovery for the UK offshore sector.”
The news came after Aberdeenshire politician Dennis Robertson copped criticism after claiming there was “no crisis” in the North Sea’s oil jobs scene, saying instead the workforce was “booming”
Oil and Gas UK has estimated that some 65,000 jobs have been lost during the current oil price downturn.
Scottish Labour leader Kezia Dugdale called Robertson’s comments “astonishing”
Also last week, Norwegian Energy Company (Noreco) was forced to exit the North Sea’s Huntington field after its licence partners E.ON UK E&P and Premier Oil said they would exercise their rights to acquire its participating interest for no consideration.
This came after Noreco was served a default in November after failing to attract a buyer for its 20% stake in the field, located 200km east of Aberdeen.
