Oil giants respond to pressure by axing 1,200

THE OIL industry yesterday suffered its biggest round of job losses for a year after several companies including British Petroleum and Shell confirmed a total of 1,200 layoffs in the UK and Norway.

BP said it was making 230 London staff redundant in its exploration business. Shell said it was planning to cut 450 in Norway and Elf Enterprise, the North Sea joint venture between Enterprise Oil of the UK and Elf Aquitaine of France, announced that it was shedding 200 in Britain.

A further 100 British jobs are likely to be lost at Marathon Oil, the exploration group, while Chevron announced that it was cutting 60 jobs at Ninian, the big North Sea oil field.

It also emerged yesterday that Stena Offshore, the Swedish group, was planning to reduce its North Sea workforce by about 100.

The moves partly reflect tough trading conditions. Crude oil prices have slumped from about dollars 19 to less than dollars 14 a barrel in the past two years. In response, the industry has attempted to drive down costs by shelving uneconomic projects, using more advanced technology and joint ventures.

BP said its job cuts would be 'across the board' at exploration departments not involved in serving key territories such as the North Sea, Vietnam and the former Soviet Union.

Shell's cuts follow the completion of two big platforms in Norwegian waters.

A spokesman for Elf Enterprise said: 'Our cuts are essentially to maintain the strength of the company during tough market conditions which are faced by all companies operating in the North Sea.'

Ironically, crude oil prices have firmed this month because of a cold snap in the US that has pushed up demand for heating oil. Brent crude closed 44 cents higher at dollars 14.70 a barrel yesterday.