More than 12,000 jobs are being axed by two of Britain’s leading energy companies on the back of lower oil prices and major internal restructuring.
Shell is to cut 6,500 staff and contractors worldwide while Centrica, the owner of British Gas, wants 6,000 jobs to go, mainly in the UK.
The cutbacks at Centrica – one of the big six domestic gas and electricity suppliers – is likely to cause a political storm as the British Gas arm doubled its profits to £528m.
The price of oil has halved over the last 12 months has forced oil and gas companies onto the defensive and spending to be slashed. But Centrica has come under a new management which promised radical change.
Shell saw its second quarter profits slump by 35% to £3.36bn while Centrica’s first half adjusted operating profits profits were down by only 3% to £1bn.
Centrica, under its new boss, Iain Conn, says it wants to save £750m of annual cost savings by 2020 and plans to dispose of up to £1bn of oil and wind assets.
Conn, brought in from BP at the start of the year, said he was cutting back on North Sea exploration and production as well as power generation but he promised to keep investors happy.
“Alongside a major group-wide efficiency programme, this will underpin long-term shareholder value, as we target operating cash flow growth of 3-5% per year and deliver a progressive dividend policy.”
This article was written by Terry Macalister, for theguardian.com on Thursday 30th July 2015 07.52 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010