North Sea oil in trouble

According to a report in Britain's Mail Online, quoting industry executives, the country's North Sea oil industry is close to collapse due to the plunging price of crude.

Producers told the newspaper that thousands of jobs are at risk, wages are being cut and fields are becoming uneconomic after the price of Brent crude – the benchmark for oil purchases worldwide – almost halved in six months.

Robin Allan, chairman of the independent explorers' association, Brindex, said that, with further price declines expected, the North Sea industry was being pushed to the brink of collapse.

"It's almost impossible to make money at these prices – it's a huge crisis," said Mr Allan, who is also an executive at North Sea firm Premier Oil.

BP and Shell plus oil services firms Petrofac and Wood Group are all cutting rates for North Sea contractors, with Wood also freezing the pay of its 4,000-strong UK workforce.

The American company, ConocoPhillips, is cutting 230 out of 1,650 jobs in the UK, and oil services firm Schlumberger has cut back its UK-based fleet of survey ships.

The decline has been caused by a rapid growth of US shale output and a refusal by the oil producers cartel, OPEC, to reduce production. OPEC has made clear it is willing to push prices as low as $40 a barrel.

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