Friday Jun 10

Royal Dutch Shell PLC has announced that part of their spending will comprise of a $4 billion investment for the North Sea.

Plans for this injection are set to be executed between 2016 and 2018, and is set to be similar to expenditure in the past in this region, having marked the entire North Sea portfolio as part of Shell’s “cash engines” business.

Shell’s vice president for Upstream in UK and Ireland, Paul Goodfellow said that it will “include significant investments with our partners West of Shetland in the Clair and Schiehallion projects in which Shell has a 28% and 55% share respectively.”

“Shell continues to have a substantial business in the North Sea with 65 interests in the North Sea Fields, 33 North Sea platforms and two Floating Production Storage Offloading (FPSO) vessels – one operated and one operated on our behalf.”

The announcement also comes swiftly after new statistics showed an estimated 120,000 jobs will be lost by the end of 2016, as a result of the UK offshore oil and gas industry collapse. The investment is set to become a catalyst to restore competitiveness and stimulate activity in the North Sea

The oil giant had announced earlier this week that it would cut global investment in light of the recent reductions in oil price, in a bid to reassure the market on the amount of debt it has taken on following its $48 billion acquisition of BG Group in February. Furthermore, last month Shell also had unveiled plans to cut a further 2,200 jobs globally on top its previous target of 10,300 layoffs already planned to adjust to oil prices staying “lower for longer.”

Mr Goodfellow also added: “Shell’s integration with BG provides an opportunity to accelerate our performance in this ‘lower for longer’ environment. We need to reduce our cost base, improve production efficiency and have an organisation that best fits our combined portfolio and business plans”

“That is why we recently announced that Shell will reduce the size of the organisation supporting our UK and Ireland Upstream business by around 475 people. Following these changes, Shell will remain a key employer in the North-East of Scotland with around 1,700 employees”

Shell’s plans to remain a key employer in Scotland comes as a relief amidst claims by Scottish Labour that the SNP ignored the oil jobs crisis for months because it was “politically embarrassing.” More firms are expected to follow suit, through growth by diversifying into new sector and investing in new technology.

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