Scotland business

BP set to shed 600 North Sea jobs

BP's Aberdeen headquarters

BP has announced plans to shed about 600 jobs from its operations in the North Sea.

The oil giant said the majority of the staff and contractor posts would go this year, with the rest expected to be lost by the end of next year.

The job losses amount to about a fifth of BP's North Sea workforce.

BP said it was taking the step in the face of "toughening market conditions" but added that it remained committed to the North Sea.

The cuts are among 4,000 posts BP plans to shed from its global oil exploration and drilling business.

The announcement comes a day after oil firm Petrofac said up to 160 UK jobs could go under a restructuring plan.

'Long-term future'

Mark Thomas, regional president for BP North Sea, said: "We are committed to the North Sea and see a long-term future for our business here.

"For example, in 2016, we are continuing to invest around $2bn of capital into North Sea projects and a further $2bn in running our North Sea operations.

"This will sustain many hundreds of jobs both in BP North Sea and our supply chain going forward.

Image copyright PA

"However, in toughening market conditions and given the well-documented challenges of operating in this maturing region, we need to take specific steps to ensure our business remains competitive and robust.

"An inevitable outcome of this will be an impact on headcount and we expect a reduction of around 600 staff and agency contractor roles by the end of 2017, with the majority of these taking place this year.

"We are speaking to our staff and agency contractor management and will work with those affected over the coming months."

'Huge importance'

The UK government's Scottish Secretary, David Mundell, is expected to hold talks soon with the Scottish government's energy minister, Fergus Ewing, over the announcement.

Mr Mundell said: "The UK government will work with the Scottish government to ensure help is provided to those affected, including through the Job Centre Plus network.

"The UK government recognises the huge importance of the North Sea, to Scotland and the whole of the UK."

First Minister job Nicola Sturgeon described the job losses in the North Sea as a "crisis" for those affected but insisted that the sector had a "strong future ahead".

She said: "I think it is important to note and to welcome BP's continued commitment to the North Sea.

"BP has reiterated today its investment plans, both in capital investment and operational investment in the North Sea this year and has said that it sees a long-term future for its business."

She said she would ensure the taskforce, which was set up last year and is chaired by Lena Wilson from Scottish Enterprise, was doing everything it could for individuals facing the prospect of redundancy and the industry as a whole.

'Major crisis'

Lewis Macdonald, Scottish Labour MSP for the North East of Scotland, said the job cuts were "another huge blow" for Scotland's oil industry.

He added: "With so many jobs being lost in the north east, and no sign of a recovery any time soon, it is time to reconvene the oil summit held just under a year ago and for the SNP government to spell out what their strategy is for dealing with this major crisis."

Scottish Liberal Democrat MSP for North East Scotland, Alison McInnes, said "real support" was needed from the UK government if the North Sea oil and gas industry were to overcome the challenges it faced.

Maggie Chapman, Scottish Greens spokeswoman on social justice, said the "need for a plan to transition the Scottish economy away from dependence on fossil fuels" had become "ever more important".

'Very disappointing'

John Boland, from trade union Unite, said: "This morning's announcement shows the crisis which has gripped our oil and gas sector for over a year now is far from over. It's another hammer blow for jobs and skills.

"We need an emergency convention of all the industry stakeholders - government, employers and trade unions - to tackle this crisis so we have a safe and sustainable industry for the next generation."

Aberdeen City Council leader Jenny Laing said: "This is very disappointing news and a sign of the continued difficulties facing the sector, but we welcome the commitment from BP that the company still sees a long-term future in this area and is continuing to invest heavily in the North Sea."

Industry body Oil and Gas UK said the plummeting oil price had impacted heavily on activity across the UK Continental Shelf.

Chief executive Deirdre Michie said: "While Oil and Gas UK cannot comment on the commercial decisions made by its members, companies are having to take very difficult decisions in what continues to be a challenging time, and we, as an industry, must be thoughtful and supportive of our colleagues who are being made redundant or facing uncertainty."

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