North Sea oil company Talisman Sinopec has become the latest energy company to respond to a near 60% cliff-fall in crude oil prices by cutting jobs.
The company – which is part-owned by the China Petrochemical Corporation (Sinopec) – is to lay-off 300 workers from its N. Sea operations comprising 200 contractors and 100 staff. These equate to about 10% of the company's UK workforce.
Talisman Sinopec is one of the North Sea's largest operators – with interests in 46 fields, of which it operates 37, on the UK Continental Shelf, with 11 offshore installations and one onshore terminal.
BP, Shell, Chevron and ConocoPhillips have all announced reductions in their North Sea workforces recently, and around the world – US-based giant oil services companies Schlumberger, Halliburton and Baker Hughes have also announced thousands of job cuts since the start of this year.
Last night, Paul Warwick, Managing Director, Talisman Sinopec Energy UK Ltd, said: "Our industry is operating in a mature environment, against a backdrop of a declining oil price and ever-increasing operating costs alongside falling production levels, reduction in exploration and asset integrity and maintenance issues.
"We are not immune to those challenges and are taking appropriate actions to tackle them.
"As part of the ongoing transformation of our business, Talisman Sinopec is proposing material changes in our onshore teams which will result in the reduction of a number of positions within the organisation. We have also introduced immediate reductions in contractor rates. We have spoken with our workforce and are supporting them through the process.
"We are committed to working with all our stakeholders, including our shareholders, workforce, business partners and regulatory authorities, to work through this challenging environment.
"The next chapter for Talisman Sinopec demands creativity and innovation as we develop excellence in late-life asset management and decommissioning. We are shaping the future direction of our business – and industry – to protect our long-term sustainability within the sector."
"We will continue to review these numbers in the current climate."
However, there is brighter news on the horizon for next year when Talisman Sinopec plans to bring the £1.6 billion Montrose Area Redevelopment project (MAR), which will extend the life of one of the UK's oldest platforms – established in 1976 – out to at least 2030 – on-stream.
This project will reinvigorate established fields and integrate them with two undeveloped fields, Cayley and Shaw. When it comes online in 2016, the MAR project will unlock 100 million barrels of reserves, creating or sustaining more than 2,000 jobs in construction, fabrication, installation, subsea engineering and drilling.
Warwick added: "The government has recognised its value to the UK by making it the first project to benefit from the brown field tax allowance introduced in 2012 to encourage investment in infrastructure and hydrocarbon resource."