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Shell to axe 300 jobs, but small firms’ North Sea boom goes on

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The Scotsman: Shell to axe 300 jobs, but small firms’ North Sea boom goes on

Published Date: 24 April 2008
By Frank Urquhart and Hamish Rutherford

EUROPE’S oil capital was yesterday reeling as energy giant Shell UK announced plans to axe 300 jobs at its Aberdeen headquarters, prompting union demands for the company to quit the North Sea.

The cuts – said to signal a continuing retreat by the major players in the North Sea – were revealed as Dana Petroleum, one of the leading small independents moving into the maturing basin, saw its shares soar to record highs. The spike follows the announcement of a new oil discovery.

The job losses at Shell will be phased over the next three years and are expected to result in as many as 180 compulsory redundancies among its 2,400 shore-based North Sea staff.

The announcement comes seven months after BP announced plans to axe 350 jobs at its Aberdeen base. Union leaders immediately called for Shell to pack up and leave the North Sea and sell off its remaining assets in British waters.

Graham Tran, Aberdeen district officer of the Unite Amicus union, claimed: “It is absolutely clear that Shell are no longer committed to the UK and the North Sea in general.

“If they are going then they should go and tell us now. And let’s set a timetable and help them on their way. The future of our members lies with companies elsewhere. There is a lot still to be got in the North Sea, but it’s a future without Shell and the sooner they go, the better.”

Mr Tran pointed out that in January, the parent company Royal Dutch Shell reported annual profits of £13.9 billion – a record for a UK-listed company. He said: “They are making obscene profits and failing to invest those profits in the safety and well being of the workforce. For a company to be making record profits of £1.5 million a minute and to be talking about cutting costs is a disgrace.”

However, Shell chiefs angrily dismissed the union claims as “ludicrous” and said their commitment to the future of the North Sea was unwavering.

John Gallagher, a senior Shell executive in Aberdeen, said: “To say that about one of the leading players in the industry is frankly ridiculous. We are bringing four fields on stream this year alone.

“We are wholly committed to the North Sea and we have been since the beginning of this basin and spent about £50 billion or so over the last 40 years. The North sea is getting tougher and more competitive, but Shell will chase every opportunity.”

Mr Gallagher, who is Shell UK’s vice-president technical, said the job losses were being implemented because of a need to cut costs to remain competitive and as a result of Shell’s decision to sell off a number of its North Sea assets.

Brian Adam, the Scottish National Party MSP for Aberdeen North, said: “This decision raises concerns over Shell’s continued commitment to the North-east, with these job losses coming on the back of their decision to pull out of a proposed expansion at the Altens site in the city.”

http://news.scotsman.com/scotland/Shell–to-axe-.4014392.jp

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