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Shell to shut its main UK research base and transfer its work overseas

Hundreds of scientists to be relocated as oil multinational aims to shift most research and development work to Germany by 2014…

Shell staff told the Guardian privately that they were “seething”…

Terry Macalister:, Sunday 15 January 2012 15.12 GMT

Shell, led by Peter Voser, is to close its technology centre in Thornton, Cheshire. Photograph: Guido Benschop/AFP/Getty Images

Shell is to shut its main UK research and development base and transfer the work overseas in a bitter blow to Britain’s knowledge economy.

Hundreds of senior scientists working at the centre at Thornton in Cheshire will be scattered to other offices in a move that follows the sale of the nearby Stanlow refinery and is seen by some as a more general retreat by Shell from the UK.

Shell Technology Centre Thornton has been the base for developing biofuels and more traditional fuels for customers that include the Ferrari Formula One racing team.

Only 18 months ago the R&D base launched two new FuelSave products using the former England cricketer Andrew Flintoff to lead the marketing effort.

But the facility, where almost 300 scientists work, is to shut completely in 2014 with Shell concentrating its R&D efforts in Germany and other overseas centres.

A spokesman for Shell, which made £11.4bn in its last full financial year, said some of the positions would “migrate” to Shell’s UK headquarters in London. Other staff could work in Manchester, he added.

“This relocation of employees within the UK follows the decision … to move the site’s laboratory activities, largely to Hamburg but also to other sites globally, as part of a global review of our technology footprint,” he said.

Shell staff told the Guardian privately that they were “seething” that the oil firm had been gradually cutting staffing at Thornton after closing R&D bases at Sittingbourne in Kent and Egham in Surrey. They said it reflected a general reduction in the importance of UK operations at the Anglo-Dutch group since the last British chief executive, Phil Watts, left in 2004 after a row with the US securities and exchange commission over the way the company had been booking its oil reserves in its accounts.

Shell, now led by a Swiss man, Peter Voser, announced the sale of Stanlow – its last UK refinery and the country’s second largest – to Essar Energy of India in 2010.

And last week Shell, which is looking at ways to reduce its costs, said it planned to close its pension scheme to new entrants next year in order to “reflect market trends in the UK”. Existing members of the fund will be unaffected.

After last spring’s budget, Shell said it might sell some of its North Sea oilfields because of tax changes but its nearest rival, BP, has also faced accusations it is investing less and less in its home market. Shell, which is expected to unveil fourth-quarter profits of about $5bn (£3.25bn) on 2 February, said it hoped the Thornton site could still continue to pioneer R&D.

A spokesman said: “We will work with interested parties to explore options for re-use of the site and facilities and we hope that science, technology and research can continue to be part of its future.”

Meanwhile, Shell’s hopes of drilling exploratory wells in Arctic waters received a boost last week with the affirmation that its federal air permits for the Chukchi Sea were properly granted. The US environmental protection agency’s appeals board rejected Alaska native and conservation groups’ challenges to the granting of air permits.

Shell Alaska’s spokesman Curtis Smith announced that the decision meant Shell, for the first time, had usable air permits that would allow its drill ship, the Noble Discoverer, to work in the outer continental shelf off Alaska’s north-west coast this year.

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