Shell to cut staff, change working patterns in North Sea

LONDON -- Shell UK plans to reduce the number of staff and agency contractors who support the company’s UK North Sea operations by at least 250 in 2015. Shell will also introduce changes to UK North Sea offshore shift patterns.

The measures are part of a range of initiatives Shell has been pursuing to manage costs and improve the competitive performance of its operations around the world.

Staff and agency contractors based in Aberdeen and on installations in the North Sea were informed of the plans during a meeting on Thursday.

Paul Goodfellow, Shell’s Upstream V.P. for the UK and Ireland, said, “The North Sea has been a challenging operating environment for some time. Reforms to the fiscal regime announced in the budget are a step in the right direction, but the industry must redouble its efforts to tackle costs and improve profitability if the North Sea is to continue to attract investment.”

“Current market conditions make it even more important that we ensure our business is competitive. Changes are vital if it is to be sustainable. They will be implemented without compromising our commitment to the safety of our people and the integrity of our assets.”

Shell UK will now begin a period of staff engagement. The reduction in staff and agency contractor numbers is in addition to the 250 announced in August 2014.

Last week, Shell said that changes to the tax regime are vital to encourage investment in the North Sea. To help secure Britain’s future as a significant oil and gas producer, the industry also urgently needs to tackle the issue of rising costs. According to Oil and Gas UK, around 20% of UK production is uneconomic at a $50/bbl oil price.