Concerns grow over North Sea jobs as oil industry faces price crisis

TROUBLED TIMES: The drop in oil prices is putting dozens of new development projects in the North Sea and Europe at risk.
TROUBLED TIMES: The drop in oil prices is putting dozens of new development projects in the North Sea and Europe at risk.

Government ministers have been urged to ditch their “party politics” and support the crisis hit oil industry as energy giant BP reacted to the fall in prices by cutting hundreds of jobs.

The firm expects to shed 200 onshore staff, while 100 contractors’ posts will also be axed.

With the price of oil now below 50 US dollars a barrel, Holyrood Energy Minister Fergus Ewing said this has resulted in “the most serious jobs situation Scotland has faced in living memory”.

Jake Molloy, regional organiser for the RMT union, warned more job losses could be on the way.

Speaking in Aberdeen, where UK Energy Secretary Ed Davey was meeting leading industry figures, Mr Molloy said: “We anticipate this is just the beginning of BP cuts as we’ve seen the rest of the operators announce further cuts to offshore staff which will have a knock on effect with the supply chain and everything else.”

He added: “We feel it’s the wrong approach, the slash and burn approach of yesteryear is being adopted again and we think it’s fundamentally flawed and can only damage the industry long term.”

Mr Davey said the UK Government had “great sympathy with all those directly affected” by BP’s announcement.

“The recent sharp reductions in oil prices are very challenging for companies active in the North Sea and that’s why I’m here in Aberdeen today to meet with industry leaders to address the challenges the North Sea industry faces both in the short and longer term as a matter of priority,” he stated

“BP is a significant investor and employer in the North Sea and the UK Government recognises the importance of the North Sea sector, both in terms of thousands of Scottish jobs it supports and its overall benefit to the whole UK economy.”

The Liberal Democrat also told BBC Radio Scotland that ministers anticipated the falling oil price could result in “some difficult decisions for many oil and gas companies”.

After last September’s vote on Scottish independence, he said: “One of the reasons why I was keen the United Kingdom stayed together is because we are stronger together; if Scotland was having to face this alone, its financial situation would be, frankly, dire.

“We may well be able to have extra help for the North Sea - we want to work out the best thing to do in the short term and in the long term - but because the UK is stronger together it is able to make those decisions. That’s good news for the north east of Scotland, it’s good news for the whole of the United Kingdom.”

Mr Molloy’s message toMr Davey and his UK Government colleagues was “get your head out the sand”.

The union leader said: “What we’re seeing here is a natural asset being badly managed by Westminster. Westminster has used the North Sea as some form of cash cow for as long as we’ve been producing oil and when we come to a difficult time they are unable to react.

“So much so that our members and workers generally pick up the tag. What we’re seeing is increasing hours and redundancies.”

He told politicians: “This is not about keeping your constituency happy with low petrol prices, this is about sustaining oil and gas production form the North Sea, about sustaining jobs, about maintaining the infrastructure which will produce and sustain oil production and about keeping the economy buoyant beyond May.

“Because all we’re seeing right now is party politics rather than meaningful intervention and support for an industry in crisis.”