An oil and gas engineering heavyweight has announced plans to axe jobs in Scotland as it complained that North Sea tax hikes have taken a heavy toll on activity in the area.
Hunting will complete a round of layoffs that will lead to a reduction in staff numbers at a plant in Aberdeenshire where it produces equipment used in oil and gas wells.
The company said it was making the move in response to a sharp drop in the revenues it generated in the North Sea following tax hikes in recent years. The Labour Government compounded the problem by increasing the rate of the windfall tax in the Budget and announcing plans to curb exploration activity.
“Government policy is preventing our customer base from spending money,” said Hunting executive Graham Goodall.
“With no drilling licences or activities in the North Sea that has an impact on our business and peer group.”
He added: “Our revenues are not anywhere close to where they used to be and you can’t carry the same head count as we used to.”
READ MORE: North Sea oil jobs at risk as embattled engineering giant looks to cut costs
Mr Goodall said the problem dated back several years. The windfall tax was introduced by the Conservative Government.
However, the Labour administration has not helped. Mr Goodall fears it could cause massive harm to the oil and gas industry even as doubts remain about the viability of energy secretary Ed Miliband’s plan to fuel a boom in renewables activity.
“We need to be drilling and producing oil and gas in the North Sea,” insisted Mr Goodall, adding: “The energy transition is way off where it needs to be before they can exit oil and gas.”
Highlighting the risk that oil and gas firms could shift investment overseas, he added: “If they’re serious about the renewables space and the energy transition they need to spend their money.”
Mr Goodall said Hunting will shed an undisclosed number of jobs at its Badentoy plant under plans to transfer some production activity to a new one in Dubai. Some jobs in shared services functions based in Badentoy will also go.
Hunting employs around 100 people in Badentoy.
READ MORE: Mark Williamson-North Sea drilling curb plans look mad amid Trump trade threats
Some work will be transferred from a Hunting plant in the Netherlands that the group decided to close to its facility at Fordoun in Aberdeenshire, where 45 people work.
The changes form part of a restructuring that is expected to restore Hunting’s Europe, Middle East and Africa division to profitability. The group’s operations in other areas are performing well.
Mr Goodall noted that Hunting has shown its adaptability by developing a presence in emerging energy markets such as geothermal engineering and carbon capture and storage.
In January London-listed Hunting said it planned to complete a major restructuring of its EMEA operations following a review which had taken into account the confirmation of the tax regime of the UK North Sea oil and gas industry and the parallel strategy of the UK government to decarbonise its energy supply. The restructuring is expected to generate $10 million cost savings.
The group has launched a formal redundancy consultation process with employees that is expected to last 30 days.
Hunting employs 179 people in the UK out of a group total of 2,367.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel
You must verify your phone number before you can comment.
Please enter your phone number below, and a verification code will be sent to you by text message.
Please enter the six-digit verification code sent to you by SMS.
Your verification code has been sent a second time to the mobile phone number you provided.
Your verification code has been sent a third time to the mobile phone number you provided.
You have requested your verification code too many times. Please try again later.
Didn’t receive a code? Send it againThe code you entered has not been recognised.
Please try again
You have failed to enter a correct code after three attempts.
Please try again later.
Your phone number has been verified.
Your phone number has been stored with your account details. We will never use it for anything other than verifying that you are the legitimate owner of this account.