Umbrella Company employees and other independent professionals contracting in the North Sea oil and gas industry face a bruising year in 2015 after BP undertook a major restructuring exercise during December in response to tumbling world oil prices. The upshot is the axing of 100 contractor roles and 200 jobs in a move that resembles decisions taken recently by other oil and gas companies including Shell, Chevron and ConocoPhillips.
BP has been downsizing since the Deepwater Horizon oil spill of 2010 in the Gulf of Mexico. In an announcement the company said that it had to take account of “toughening market conditions” and that the recent fall in oil prices, which have halved over the last few months, “has simply made this even more imperative”.
The energy secretary, Ed Davey, later announced the formation of a new task force headed by Andy Samuel, the first CEO of the Oil and Gas Authority, to help the sector cope with plummeting prices and fast track some strategic work that is already underway. He also hinted that George Osborne’s upcoming budget in March could include some tax breaks for the sector. Scotland’s first minister, Nicola Sturgeon, supports this move.
Ms Sturgeon has written to the Prime Minister demanding urgent cuts in North Sea oil production charges and urging the axing of the supplementary charge on the oil and gas industry, which the government introduced in 2011. Oil and Gas UK endorses tax breaks for the industry, which it believes will help it to deal with free-falling prices.
Meanwhile, BP announced that it has already spoken to staff and plans to work with those affected in the coming months.