LONDON-- Royal Dutch Shell PLC said Thursday that it would
eliminate at least 250 jobs in its U.K North Sea operations this
year, the latest workforce cut for big energy companies trying to
reduce spending as crude trades for about half its 2014 peak.
The job cuts come on top of the 250 positions Shell eliminated
last summer from its U.K. operations and represent another blow to
a North Sea oil industry that has seen its often high-cost projects
upended by an oil-price collapse.
Shell, which has about 94,000 employees world-wide, had been
trying to cut costs even before the oil price began falling, after
being criticized by investors for years of heavy spending on big
projects.
The company said the cuts "are part of a range of initiatives
Shell has been pursuing to manage costs" world-wide, and will
include staff and contractors. Shell said its U.K. North Sea
business has about 2,400 workers, excluding those on service
contracts where outside companies control staffing levels.
Other oil companies have also been attempting to reduce costs
and rein in spending since oil prices began falling last summer.
Brent crude, the global benchmark, traded for almost $115 a barrel
last July but was selling for about $58 on Thursday.
In addition to Shell's cuts, oil-field-services giant
Schlumberger Ltd. said in January it would cut 9,000 positions.
France's Total SA said it would cut 2,000 jobs by 2017. BP PLC said
in January it would cut about 200 North Sea employees and 100
contractors. South African petrochemicals produces Sasol Ltd. said
in March it cut 1,500 jobs and cut back on capital projects.
Companies operating in the U.K.'s aged North Sea fields have
been struggling for years. After a 1980s boom that led to a world
oil-supply glut, the North Sea's oil fields have become less
productive and more expensive than in the past. Companies there are
on the hook for the costs of decommissioning old platforms, and
everyday operating expenses have also gone up in recent years.
Earlier this month, the U.K. government announced tax cuts and
incentives for oil and gas companies to extend the lives of North
Sea fields.
Write to Justin Scheck at justin.scheck@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires