Shell chief executive Ben van Beurden and his BP counterpart, Bob Dudley, were the star guests at the Offshore Europe conference in Aberdeen yesterday. To the surprise of no one, they used their keynote addresses in the spiritual home of the UK’s oil and gas industry to reaffirm their companies’ commitments to the North Sea.
This has become somewhat of a ritual for the European majors since oil prices began their sharp descent three years ago. Ironically, the chief executive best placed to offer soothing words was nowhere to be seen. Total boss Patrick Pouyanne would have cut a more reassuring figure on stage, given his firm’s surprise $7.45bn deal to buy Denmark’s Maersk Oil last month.
UK finance minister George Osborne might consider taking Shell off his Christmas card list this year.
Just a week after he unveiled tax cuts aimed at stimulating investment in the North Sea’s flagging oil and gas industry, Shell has announced more job losses.
The firm is axing 250 staff and contractors from its UK North Sea business, on top of the 250 job cuts it announced in August last year. Not only that. Shell is proposing that its offshore workers change their shift patterns to “three weeks on, three weeks off” from the traditional North Sea model of “two weeks on, three weeks off”.
BP employees across the world found out this week that their pay is being frozen this year. Add to that voluntary redundancies being offered to BP staff in Trinidad and Tobago and hundreds of job losses in the UK North Sea and Azerbaijan, and you have a company taking sub-$50/bl oil prices pretty seriously.