More than 150 N. Sea oil jobs are set to be axed by Petrofac after the oil explorer confirmed that it is ‘integrating services into a single business’
Walter Thain, Director, Offshore Projects and Operations at Petrofac, did not specify where these job losses would come from within the company, which said it was taking action to ‘remain competitive against a challenging industry backdrop’.
A consultation with the workforce is expected to end later this month. A Petrofac spokesman added: “We’re constantly looking for ways to make our business as cost efficient and delivery-focused as possible.
“Integration of our UK services will deliver a streamlined and effective business which is designed to ensure we remain competitive and sustainable against a challenging industry backdrop.
“We’re making every effort to minimise the impact on our 1,900 UK employees.
“Under our current proposals the positions potentially at risk represent less than 10% of our entire UK population and will be spread across our operating centres.”
Petrofac’s announcement came as the price of benchmark Brent crude oil fell to $32.05-barrel – its lowest price since April 2004.
US merchant bank Goldman Sachs has maintained for over a year that it may take a drop towards $20-barrel to flush out enough higher-cost oil production to re-balance the market.
Crude oil prices have fallen by more than 70% since the downturn began in mid-2014 as rising global production sees hundreds of thousands of barrels of crude produced every day without a buyer.
This imbalance looks set to increase this year as Iran brings barrels back to global markets and other countries such as Iraq and Russia and the Saudi-dominated OPEC oil cartel pump at or near record levels.
The lower the wholesale price of Brent crude oil falls, the shorter the remaining economic working life of the North Sea becomes as it is increasingly uneconomic to commit new investment to explore high-price oil fields at low-wholesale prices.