JOHN Swinney last night urged Chancellor George Osborne to make today’s Budget count for Scotland’s oil industry after a major player revealed plans to slash staff numbers.
French engineering giant Technip, which provides assets, products and services to aid development of offshore gas and oil fields, has announced plans to cut 6,000 staff worldwide as part of moves to save €830 million (about £590m) over 2016-17.
The firm is a major employer in Aberdeen, where it has a workforce of around 1,000, and managers have highlighted the North Sea as an area set for losses because new project awards there are “under pressure”.
Last night the Deputy First Minister said the UK Government must act to safeguard the future of Scotland’s energy sector.
He said: “It is vital that the UK Government introduces tax incentives to support exploration and investment in the North Sea.
“The Scottish Government wrote to the Chancellor of the Exchequer last week and outlined our calls for further targeted fiscal reforms to support the sector.
“It is crucial that this Budget delivers incentives for exploration and provides a commitment to no tax rises for the industry over the course of the Parliament, with mandatory industry consultation on all significant policy proposals.
“Such assurances of no tax rises until at least 2020 are needed in order to help to provide the stability and predictability in the UK tax regime on oil and gas which has been so lacking over the last 15 years.
“Critically, the UK Government must deliver on its commitment to consult on incentives to boost exploration in the North Sea.”
Technip described its Scottish staff as “talented individuals” who “collectively ensure Technip retains its long-standing status as the leading subsea engineering and construction contractor in the UK”. The Paris-headquartered firm conceded the cost-cutting would have “tough consequences for employees”.
In a statement, Technip said: “The group will reduce its global workforce by approximately 6,000 and will pursue the streamlining of its activities started last year to focus on its core assets and activities. Employees will be informed and employee representatives consulted in due time on a local basis.”
The news follows other announcements of North Sea cutbacks by major players including Shell, which is set to shed 250 staff and agency jobs this year, while Taqa, based in Abu Dhabi, will cut its North Sea onshore workforce by around 100.
Offshore engineer Subsea 7 will also reduce its UK headcount by 410 and dredging specialist X-Subsea entered administration in April with the loss of 26 jobs.
The North Sea is the largest oil producer in Europe and a recent report by the Scottish Government suggests there are up to 23 billion recoverable barrels of oil equivalent in the UK continental shelf.
Last night a Scottish Government spokesperson said: “The Scottish Government will work closely with Technip and with those who face redundancy to help them into alternative employment.”
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