UK’s oil services firms to cut jobs to ride out price slump
LONDON – Amec Foster Wheeler Plc (AMFW.L) and Petrofac Ltd (PFC.L) on Tuesday joined a growing list of London-listed oil and gas support services companies planning to cut jobs in response to the tumble in oil prices.
Benchmark Brent crude oil prices LCOc1 have nearly halved in the first quarter, prompting large production and exploration firms to slash their spending budgets by an average 10-15 percent and renegotiate contracts with the service providers.
Amec, which employs 40,000 people, said it was in consultation with 149 Aberdeen-based employees and that about 64 roles could potentially be affected. The company’s clients include Royal Dutch Shell Plc (RDSa.L) and Exxon Mobil Corp (XOM.N).
Petrofac was in talks to cut around 100 offshore jobs and up to 100 more onshore could be affected, a company spokesman said. The company, which employs 20,000 people, did not specify the location of the job cuts.
A day earlier, smaller peer John Wood Group Plc (WG.L), the Aberdeen-based company whose customers include BP Plc (BP.L), said it was in consultation with 380 PSN unit employees, or about a fifth of its onshore UK workforce for the unit, and that 80 jobs could be lost.
Britain’s North Sea is one of the most expensive exploration areas in the world and has seen oil majors cut hundreds of jobs. The region employs over 400,000 people.
To help the battered industry, Britain announced last month a series of oil tax cuts and the creation of an investment allowance to revive oil production that has fallen to the lowest level since fields started pumping fossil fuels in the mid-1970s.
Companies with exposure to the United States have also been hit and have taken a number of initiatives, ranging from wage freezes to restructuring.
Weir said in February that it would let go of around 650 people, or about 22 percent of its North American workforce in its oil and gas division and also said it would consolidate five smaller manufacturing facilities to save cash.
Hunting has slashed about 20 percent jobs since the beginning of the year. – Reuters