OIL services firm Wood Group is looking to slash about 300 jobs after launching a consultation process with 1,000 of its UK onshore workers.
The Aberdeen-based company said it took the decision in response to “continuing cost and efficiency challenges affecting the oil and gas sector”. Union officials described the losses as “more bad news” for the industry and said there seemed to be “no end in sight”.
Jake Molloy, Scottish regional officer for the Rail, Maritime and Transport (RMT) union, said: “This is indicative of what is going on. There seems to be no end in sight.
Regarding the 300 jobs from the Wood Group – a big chunk of them are associated with the Shell contract and a lump of that is as a consequence of decommissioning work on the Brent field so there would be some attrition there but it’s just more bad news on top of continued bad news, unfortunately.
“The consultation has begun and they are anticipating outcomes by no later than July, I believe.”
Wood Group employs about 6,200 people onshore in the UK and recently won a major new £342.5 million contract to provide services for BP-operated offshore projects in Azerbaijan.
Last week the company announced that under the five-year deal, Wood Group PSN (WGPSN) will provide engineering, procurement and construction management services for eight platforms, creating about 200 new jobs.
The contract builds on Aberdeen- based Wood Group’s continued support of BP-operated projects in offshore Azerbaijan.
The news came a week after Wood Group secured a £100m North Sea services deal from Nexen.
The Wood Group Kenny arm is already providing subsea engineering services to the eight platforms under a multi-million dollar contract announced in October.
It includes support of BP’s existing subsea infrastructure in the Gulf of Mexico, UK and Norwegian cont- inental shelves. David Kemp, Wood Group’s chief financial officer, said: “We are streamlining our structure and our processes to reduce costs. As ever, our commitment is to act compassionately and sensitively, supporting our people through this consultation process and we will make every effort to minimise the impact on them.
“We are firmly committed to supporting the long-term sustainability of the industry in the North Sea and maximising economic recovery by ensuring we are fit for purpose, flexible and strongly equipped to deliver efficiently and effectively.”
Meanwhile, Shell announced it will cut its spending by another 10 per cent this year and warned that lower oil prices were continuing to affect its business.
Investment will be reduced from to £27.7 billion from a planned £22.8bn, after coming under pressure from shareholders to cut costs.
Shell also said profits in the three months to March had fallen to £552.8m from £3.32bn a year earlier.
On average, oil prices stood at about £24 a barrel in the first three months of 2016 – down from a peak of £79 a barrel in June 2014.
The company also warned that low oil and gas prices, significant maintenance at production sites and “substantial redundancy and restructuring charges” would hit second-quarter earnings.
Shell’s chief financial officer Simon Henry said: “Cost levels in the North Sea need to come down substantially. In terms of the UK impact, the action taken already [in relation to BG merger), is probably about it for now, but As we look at the portfolio going forward I cannot make promises.”
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here