Calls for government support of the UK’s oil and gas industry have intensified following an announcement from energy giant BP that it will cut hundreds of jobs due to the oil price slump.
About 200 jobs will be shed in the onshore sector while a further 100 contractors will have their positions discontinued. BP said the measures are necessary to ensure the business remains ‘competitive and robust’.
"We are committed to the North Sea and see a long-term future for our business here,” said Trevor Garlick, regional president for BP North Sea. “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.”
He explained the job cuts will be part of a wider restructuring focused on improving efficiencies and simplifying production processes.
Earlier this week, Scotland’s Energy Minister Fergus Ewing called on the UK government to create more favourable tax conditions to help the industry through the lean years.
The Scottish government believes a package of tax credits and allowances together with scraping a 2011 12 per cent tax surcharge could boost investment in the North Sea by some £40bn and support more than 30,000 jobs.
Energy Secretary Ed Davey, who was visiting Aberdeen to talk to leading figures in the North Sea oil and gas sector, said he had ‘huge sympathy’ with the workers losing their jobs.
"We want to do everything we can to minimise any impact,” said Davey. “The North Sea is crucial to Britain's energy industry and is a vital part of our economy."
The BP announcement sparked a strong reaction from the industry unions fearing it is just the first in a string of bad blows.
"RMT believes that the industry is making offshore workers carry the can for their failure to plan for lean times such as these,” said Mick Cash, general secretary of the Rail, Maritime and Transport (RMT) union. Instead they have gone for a short-term slash-and-burn approach that will have long-term implications for the future of the entire industry and the security of the UK's energy supplies.
He said RMT will urge industry organisation Oil and Gas UK to push for an emergency package of measures to ward off further job losses as well as closures of some less profitable oil fields.
"We are also continuing to lobby politicians for incentives to allow exploration, maintenance, safety and engineering development works to take place during this emergency period for the industry," he said.
Scotland's First Minister Nicola Sturgeon was in Aberdeen yesterday where she announced a new task force to help address the threat to jobs that comes from the drop in oil prices.
Yesterday, in its 2014 review, Deloitte Petroleum Services reported that drilling for new oil fields in UK waters has fallen by a fifth while exploration in other North Sea countries remains buoyant.