45,000 jobs to go this year

Shell plans North Sea asset sale as Wood warns of more lay-offs

Ian WoodUpdated: Shell is seeking buyers for some of its assets in the North Sea as Sir Ian Wood forecasts a further 45,000 jobs are likely to be lost in the sector.

Shell has appointed Bank of America Merrill Lynch to sound out buyers and is thought to have sounded out Sam Laidlaw, the former Centrica boss who last year launched the $5bn Neptune Oil & Gas fund to buy energy assets.

Its review follows the £35 billion acquisition of BG by Europe’s biggest oil company which strengthened its presence in the basin.

Shell is committed to selling £20bn of assets to pay for the deal. It is unlikely to make a complete exit from the North Sea.

Sir Ian, who produced the Wood Review on the future for Britain’s oil industry, said 150 jobs a day are being lost as the price slump continues to impact on output and orders.

He now says it is struggling to stabilise and the long-term viability of the region is under threat.

The pace of losses this year has remained the same as during 2015, when the price of a barrel of Brent crude plunged to an average of $52.35, nearly half the $99.03 average during 2014.

At the end of January it slumped to a 12-year-low of $27, though it has climbed back above $40. Analysts expect it to settle in a range of $40-$60.

“We lost 65,000 jobs in the last year, and I don’t think the losses have slowed down,” he said this weekend.

He expects the number of UK jobs in the sector to fall to about 320,000 this year as companies cut costs. The sector employed 375,000 in September last year.

Despite his gloomy prognosis, the former chairman of Wood Group believes the industry will recover.

“This is not the end of the [North Sea] oil and gas industry,” Woods said in an interview. But he insists the UK Government has to help with the recovery and develop new and untapped oil prospects such as like the west of Shetland.

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