OPEC’s compliance to its output…
The recent drop in oil…
The North Sea recently has been an unlucky, if not unfriendly, place for energy companies to do business. The latest victim is Talisman-Sinopec of Aberdeen, Scotland.
Talisman-Sinopec’s managing director, Paul Warwick, says it will cut 300 jobs – 100 regular employees and 200 contractors – from its North Sea operations as it faces declining reserves in the region’s much-tapped oil fields and the precipitous drop in company revenue caused by the more than 50 percent fall in the global price of oil.
“Our industry is operating in a mature environment, against a backdrop of a declining oil price and ever-increasing operating costs alongside falling production levels, reduction in exploration and asset integrity and maintenance issues,” Warwick said. “We have spoken with our workforce and are supporting them through the process.”
Related: Low Prices Lead To Layoffs In The Oil Patch
The Talisman-Sinopec workforce reductions came a week after BP informed its staff in Aberdeen that it was going to cut their number by nearly 10 percent – by 300 from about 3,500.
Such cutbacks by many energy companies have been going on for the past month. One is the large US concern ConocoPhillips, whose stock has lost 16 percent of its value. It announced a 20 percent cut in its capital budget last month and will lay off 230 of its 1,650 jobs in Britain.
Other energy companies, British and foreign, also are cutting back in the region. They include Schlumberger Ltd., the oifield services company, and Apache Corp., both based in Houston, as well as Scotland’s Wood Group.
And there may be more to come. On Jan. 13 the British newspaper The Telegraph reported that Ireland’s Tullow Oil was planning unspecified North Sea cuts. The company had no public comment on the report, but a knowledgeable source told the newspaper, “There will be a reduction in head count. Unquestionably, there will be a smaller Tullow at the end of this major streamlining process.”
Ian Wood, the owner of the Wood Group, issued a statement on Jan. 16 urging the UK government to increase the tax breaks it provides to drillers or face the loss of as many as 15,000 of the estimated 375,000 jobs in the North Sea oil business.
Related: Next Wave Of North Sea Oil Could Deliver A Billion Barrels
But he dismissed a comment by Robin Allan, the chairman of the British oil-exploration association Brindex, that trouble in the North Sea means the UK’s oil industry is “close to collapse.”
“These comments are over the top for an industry which thinks and plans long-term, where operators make decisions based on the anticipated price of oil in two to three years’ time,” Wood said. “It is important to have a balanced perspective at this time.”
The North Sea isn’t the only region being affected by the low price of crude oil. The oilfield services company Baker Hughes of Houston plans to cut several thousand jobs. And it Houston neighbor, Halliburton, which is in the process of acquiring Baker Hughes, also plans major layoffs. But in both these cases, the cuts would be worldwide.
And Schlumberger, which does plenty of work in Britain, says it plans to cut 9,000 jobs to remain profitable.
By Andy Tully of Oilprice.com
More Top Reads From Oilprice.com:
Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com