Oil and gas technology supplier Schlumberger has followed in the footsteps of BP announcing job cuts in in its North Sea operations

Further job cuts amidst oil price crisis

Schlumberger, the world’s largest supplier of oil and gas technology, has announced North Sea jobs will be cut as part of its global restructuring in response to the falling price of oil.

Although Schlumberger did not specify the exact figures, it was estimated the decision might affect up to 100 North Sea positions.

"The dramatic fall in oil price over the past quarter has led our customers to decrease exploration and production activity worldwide,” said Schlumberger’s spokeswoman.

"As a result, Schlumberger is reducing headcount in line with lower activity levels and this is unfortunately impacting our North Sea operations and people."

The announcement comes a day after oil and gas giant BP revealed up to 300 staff members and contractors will be made redundant.

The situation has prompted an emergency meeting between unions and employers in the oil and gas sector to discuss measures to protect the industry. Industry organisation Oil & Gas UK said it will support an earlier call by the unions and the Scottish government to introduce tax measures to relieve firms in the sector.

"The industry is working hard with government on fiscal and regulatory reform to help safeguard the long-term future of our industry,” said Oonagh Werngren, Oil & Gas UK's operations director. “Oil & Gas UK and the unions have today agreed to join together in calling for this much needed reform.”

Earlier this week, Scotland’s Energy Minister Fergus Ewing urged the UK government to revamp the tax system to help encourage investment and ward off further damage in the sector. The measures he proposed include investment allowances, tax credits and scrapping the 12 per cent tax surcharge introduced in 2011.

The tax cut proposal was further supported by North Sea oil expert Sir Ian Wood, who led the 2014 review of the industry for the UK government. Sir Ian said a tax cut of up to 30 per cent is necessary to give producers the confidence to keep their operations going.

However, Sir Ian acknowledged any measures will mostly have an effect only in the medium to long term.

"The key is to stabilise the industry, avoid a real crisis of confidence and ensure they can see a sustainable future,” he told BBC Radio 4's 'Today' programme.

"There's virtually nothing, fiscally, that can be done at $45, $50 oil to have any impact because, at that stage, very few operators are making profits and if they are not, they are not paying taxes.”

Chief Secretary to the Treasury Danny Alexander said the UK government will take the time before the Budget announcement on 18 March to get the right measures in place to support the North Sea.

UK Energy Secretary Ed Davey announced during a visit to Aberdeen yesterday that an emergency commission will be established, to look at the risks to the sector and what measures could be taken by both government and the industry to tackle them.

The commission will be led by Andy Samuel, the chief executive of the new Oil and Gas Authority, who has been tasked with leading this work with recommendations due before the end of next month.

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