BP to slash jobs in UK North Sea

British oil giant BP has informed its UK North Sea staff that the company will be reducing its workforce as a response to toughening market conditions.

In response, UK’s trade union RMT has issued a statement, warning of lasting damage to the UK’s long-term energy security from short term measures in response to the recent drop in oil prices. The union has said it is demanding sharp and decisive action from minister Ed Davey to head off serious long term damage to UK energy capacity.

RMT General Secretary Mick Cash said: “In the wake of the current price slump RMT is demanding that Westminster and the Scottish Parliament adopt a crisis management approach today to ensure sustained production, maintenance of infrastructure, retention of skills, and a robustly regulated regime in the future. Warm words from the Minister Ed Davey have to be matched by sharp and decisive action.”

In an e-mail sent to Offshore Energy Today, a BP spokesperson said that it has been well signaled around the industry that costs have been rising, and that BP needs to respond to toughening market conditions “in line with our competitors and move our cost structure into a competitive and sustainable position. “

As for competitors, The Telegraph has reported this week that Tullow Oil is also preparing to announce job cuts in its UK North Sea business. Also, Cairn Energy yesterday said it completed reorganization with 40% reduction in headcount across employees and contractors.

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 onshore staff and 100 contractor roles.  We have spoken to staff and will work with those affected over the coming months.”

Long-term damage

RMT’s Mick Cash further said: “If immediate action isn’t taken then we risk turning today’s crisis into longer term damage that would threaten the very core of our offshore industry. This is no time for playing politics when the security of UK energy supplies is on the line.”

Cash said that BP’s announcement confirms the RMT warning that tens of thousands of jobs in the industry are at stake, along with the prospect of lasting damage to infrastructure, production capacity and the safety culture.

“Intervention is absolutely critical and that is the case that we are setting out today to the politicians north and south of the border and from all sides,” Cash concluded.

While the industry is looking to cut costs due to falling oil prices, Deloitte, a consultancy group, has said that the North Sea needs continued investment from businesses and government through its current period of transition

Update: January 15, 13:47 CET

The UK Department of Energy & Climage Change (DECC) has shared a statement by Edward Davey, Secretary of State for Energy and Climate Change through four separate tweets:

Energy Secretary Ed Davey: “The recent sharp reductions in oil prices are very challenging for companies active in the North Sea” 1/4

— DECC (@DECCgovuk) January 15, 2015

ED: “I’m here in Aberdeen to meet with industry leaders to address the challenges the North Sea industry faces as a matter of priority” 2/4

— DECC (@DECCgovuk) January 15, 2015

ED: “The threat to jobs has been brought home by the news from BP today. We have great sympathy with all those directly affected.” 3/4

— DECC (@DECCgovuk) January 15, 2015

ED: “BP is a significant investor and employer in the North Sea & the UK Government recognises the importance of the North Sea sector.” 4/4

— DECC (@DECCgovuk) January 15, 2015

Offshore Energy Today staff