The Herald: Shell commits to North Sea future

GRAEME SMITH June 16 2007

Shell has pledged its commitment to the North Sea despite selling off almost all its most northerly assets but has warned further job cuts may be required to keep it competitive.

Anne Begg, Aberdeen South MP, visited the company’s Aberdeen headquarters yesterday to meet John Gallagher, vice-president technical, to express her concerns the company no longer viewed Scotland as the best investment prospect. Ms Begg claimed the SNP-led administration had created political instability by picking fights with the UK government.

Mr Gallagher assured her the decision was purely commercial and there was no political dimension.

Ms Begg said after the meeting that she was slightly less concerned than she had been after the announcement: “It is the first downsizing by a major company in Aberdeen since that election and I hope there won’t be any more.

“I would call on the SNP administration in Edinburgh not to constantly pick fights with the Westminster government. After all, the stability of the UK is very important to attract companies into Scotland and to make sure companies already here, who are global players, remain here and expand here.

“I was told this morning this decision was not about the fiscal regime. If anything, the fiscal regime is encouraging small entrants in to extract the oil from the fields which are nearing the end of their life.

“That is good fiscal management by the UK government and I just hope nothing will happen in Scottish terms which will undermine that.

“There was a strong indication that Shell are committed to the North Sea and only the next couple of years will tell.”

Mr Gallagher said: “This was purely a commercial decision made by Esso and ourselves and it does not reflect any government policy whatsoever and any expectation of future government policy.

“I reassured Anne that Shell and Esso were wholly committed to the UK and had a whole raft of projects which demonstrate that.”

Around 400 Shell staff will be affected by the sale and half are likely to transfer to the new owners of the assets. A skills shortage affecting the industry is likely to ensure any who are made redundant are able to find work.

However, Mr Gallagher warned more job losses could follow.

He said: “There has been huge cost escalation in the industry in recent years. We are now launching, over the next six to 12 months, an exercise to look at our costs across the board.”

Comment Posted by: John Donovan, UK on 8:20am today

We are asked to believe that Shell and Exxon are still committed to the North Sea. That pledge comes under the heading of BS. These ruthless oil giants are committed only to generating massive profits from high oil price to generate obscene rewards for its fat cat executives. Lee Raymond, the last CEO of Exxon Mobil retired with a financial package worth $400 million. Sir Philip Watts, the disgraced former Group Chairman of Royal Dutch Shell received a severance package worth $20 million even though forced to resign as a consequence of the Shell reserves fraud. Such individuals have no interest in the consequences of their decisions to hard-working people at the coal face of the oil industry.

With regard to Shell, it’s suspicious the decision to scale down in the North Sea and abandon grandiose plans in Aberdeen was taken now, rather that when it was possible Scottish authorities might decide on a Public Inquiry into the Brent Bravo safety scandal courageously exposed by former Royal Dutch Shell Group Auditor, Bill Campbell.

Shell workers died because Shell Expro senior management ignored warnings made by Campbell after an inquiry led by him revealed a murderous “Touch F*** All” policy which put profits before safety. He even discovered a policy of falsification of safety records.

Mr Campbell has repeatedly stated that it is only a matter of time before another tragedy occurs as a result of Shell management homicidal negligence, perhaps next time on a calamitous scale. Maybe Shell has decided to begin its departure from the scene of crime.

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