FEARS there will be more hefty job losses in the oil and gas industry in Scotland have intensified after Royal Dutch Shell announced plans to cut thousands of posts around the world.
The moves comes after the oil planned $53 billion (£35bn) takeover of BG.
The oil and gas giant said it expects to cut 2,800 roles globally as part of a planned £35 billion ($53 billion) takeover of multinational oil and gas group BG.
The cuts represent three per cent of the entire workforce of the combined firms. Shell did not give any indication how many jobs will be lost in Scotland.
It came as it emerged three vast concrete blocks, each weighing as much as the Empire State Building, may be abandoned on the floor of the North Sea, as part of Shell's decommissioning process of its Brent oil platforms.
However, the company, which employs 500 people in a finance centre in Glasgow, said the cuts will focus on areas of duplication between Shell and BG’s functions. This includes in areas like human resources.
Shell and BG both have big operations centres in Aberdeen.
They have around 2,800 staff and contractors working for them in the North Sea in total.
Shell has already cut 500 North Sea jobs in response to the crude price slump since June last year. It has shed 7,500 posts around the world.
Reading-based BG has a significant portfolio of mature assets off the coast of Scotland.
Shell wants to reduce investment in mature North Sea fields in order to focus spending on big new projects. These include the giant developments it is completing off Shetland with BP.
Shell said the restructuring announced yesterday will help it squeeze $3.5bn savings out of the enlarged business.
Chief executive Ben van Beurden said: "I am delighted we now have all the pre-conditional approvals needed to move to the next important phase.
"This is a strategic deal that will make Shell a more profitable and resilient company in a world where oil and gas prices could remain lower for some time."
Meanwhile, Shell is expected to seek approval to leave the caissons at the base of its platforms, located north-east of the Shetland Islands, on the seabed - amounting to a sanctioned breach of international regulations.
The Ospar Convention, governing marine pollution and dumping waste at sea, states oil companies must remove every part of their platforms when they are shut down and any relaxation of this requirement is likely to be met with stiff opposition from environmental groups.
The rules came into force in 1998, after a battle between Shell and ecological activists over the disposal of the Brent Spar storage buoy.
Initially the oil giant wanted to dump the buoy in the deep waters of the north Atlantic, but backed down after global pressure from governments and campaigners.
Shell is in the process of consulting with experts and stakeholders on the future of the three reinforced concrete caissons at Brent, which individually stand 160m tall and weigh 300,000 tonnes.
It said a “range of options for the Brent field” were being considered before a final proposal is submitted to the Department for Energy and Climate Change for approval.
“One of the options being considered for the concrete gravity based structures of three of the platforms is to leave them in place. Given these complex structures weigh over 300,000 tonnes each and were never designed to be re-floated, the engineering challenge is immense,” a Shell spokesperson said.
Despite the head of an independent review for Shell stating there was an environmental case for the concrete bases to remain in situ, environmental organisations remain opposed to the proposal.
Greenpeace’s chief scientist Doug Parr said: "Nothing has changed over the last two decades since Shell last got into trouble over trying to dump old kit from oil fields at sea. If rigs can be recycled we expect oil companies, like all companies in the EU are expected to do, to avoid contamination of the marine environment and maintain a drive towards a circular economy by re-using resources."
Why are you making commenting on HeraldScotland only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel