Ocean Kinetics - The Engineering Experts

Local impact of BP job losses yet unknown

BP HAS confirmed that Sullom Voe Terminal and the Clair Ridge development will be hit by some of the 600 job losses announced for the North Sea on Tuesday.

The oil giant plans to reduce the number of people working for the business in the North Sea region from 3,000 to 2,400 by the end of 2017. However, most of those jobs are likely to go this year.

The news comes on the back of 160 North Sea job losses at oil services company Petrofac, announced on Monday.

As BP embarks on a consultation with staff and agency contractors in Shetland, Aberdeen and Grangemouth, the company said that it was unable to specify how many people would be affected in the isles.

The dramatic downscaling of its workforce comes as no great surprise and is a direct reflection of the continuously falling oil price, which was hovering just above the $31 mark on Tuesday.

Economists at the Royal Bank of Scotland have meanwhile warned that the oil price could slump to as low as $16 a barrel.

But BP also said that it remained fully committed to the North Sea, pointing out that it will make capital investments worth $2 billion in the region.

The company has invested heavily in the Clair Ridge field and the terminal at Sullom Voe, while it is also believed to be still committed to a new £500 million gas sweetening plant at the terminal.

BP North Sea regional president Mark Thomas said: “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.”

The falling oil price has also led to a number of local firms being able to pick up lucrative contracts as oil companies shop around for the most cost-effective solutions.

Meanwhile, local MSP Tavish Scott said he was concerned that, in the light of falling oil prices, the industry was cutting highly-qualified jobs too hastily.

“Every commentator believes that oil prices will rise again,” he said. “I want to ensure there is North Sea oil and gas production for the long term.

“BP have to ensure they have a skilled workforce ready to reinvigorate the North Sea when oil prices start to rise again.

“BP have made a colossal investment in West of Shetland oil and gas fields. But Sullom Voe has to win work otherwise the future looks less and less certain. I will be pressing BP to commit to Sullom Voe and its long-term future.”

SIC development committee chairman Alastair Cooper said the news came as “no surprise” and he suspects there “may be more yet to come”.

Cooper said he was concerned that with lay-offs, “a lot of the expertise that exists at Sullom Voe, and the staff that’s been there 30-plus years, could be lost and that could have long term consequences for the terminal”.

Scottish secretary David Mundell is to speak to Scottish energy minister Fergus Ewing to explore ways how both governments could help workers affected by job losses.

“We can’t control world oil markets, but in a climate of low and falling prices, it is essential that, alongside supporting the oil industry, we also work to diversify the economies of Aberdeen and other oil-dependent communities to ensure their long-term success whilst continuing to engage with the industry to maximise its future potential,” Mundell said.

The Scottish Office said support was available from job centres working closely with employers to help people move into new jobs as quickly as possible.