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North Sea oil industry hit as BP cuts 600 jobs

The North Sea oil industry suffered another broadside on Tuesday as it emerged energy titan BP had cut hundreds of jobs in the region.
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The North Sea oil industry has suffered another blow...

The North Sea oil industry suffered another broadside on Tuesday as it emerged energy titan BP (LON:BP.) had cut hundreds of jobs in the region.

The firm employs 3,000 in its North Sea operations but is slashing that number by a fifth - or 600 jobs.

Most of the positions will reportedly go this year with the remainder in  2017.

It comes as the energy giant is shedding over 4,000 posts worldwide as the decimation of the oil price appears to have no end in sight.

Crude prices peaked in 2014 at around US$115  a barrel but now stand at around US$33 a barrel and some experts see it sinking as low as US$10 a barrel.

A cocktail of worries, including over China, (fully justified or not), the actions of OPEC and glut, or oversupply, fears have created the perfect storm to see black gold sink to 12 year lows in a hugely out-of-balance market.

Standard Chartered became the latest big bank to downgrade forecasts, saying it's heading for US$10 a barrel - the lowest level for nearly two decades.

It joins RBS, Morgan Stanley and Goldman, which have all recently made big downgrades.

In oil futures trading on Tuesday, Brent crude and West Texas Intermediate for February delivery are both up over 1% however but still below the US$32 mark.

Industry body Oil and Gas UK recently estimated that 65,000 North Sea jobs have been lost already during the current downturn.

Another report entitled 'Fuelling the next Generation’  stated the industry is set for a net loss of 23,000 jobs over the next five years - many in the Aberdeen and Grampian areas.

It forecasts 35,000 jobs will be lost by 2019 as operations fall into decline and new fields become harder to find and exploit.

But BP confirmed today it was committed to the North Sea.

Regional president Mark Thomas  was quoted as saying the energy group continued to invest around US$2bn into North Sea projects and a further $2bn in running operations.

Toughening market conditions and challenges of operating in this maturing region required competitive steps,  he said.

The market did not react badly to the BP news. Shares in the firm nudged 1.68% higher in afternoon trade at 333.5p.

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