Wood Group slashes jobs as oil workers vote for strike

THE tumbling oil price has forced oil services specialist Wood Group to cut its workforce by 13pc as North Sea oil workers prepare to strike.

The price of oil has more than halved since the summer last year – currently trading at $48 a barrel – causing oil firms and the companies that supply the industry to make drastic cuts.

Job losses and an increase in working hours and changes to shift patterns have led unions in the North Sea to ballot for strike action. Ballots are being counted which could lead to a walkout by helicopter pilots while around 10,000 offshore rig workers are also discussing industrial action.

Last month Unite union members rejected the Offshore Contractors Association (OCA) proposals for changes to shift rotas and terms and conditions. Aberdeen-based Wood revealed it has slashed 5,000 posts this year – with around 1,000 of these in the UK – mainly in the North Sea. It now employs around 12,000 in the UK. Wood Group chief executive Bob Keiller ( pictured) said: ‘Conditions in oil and gas markets remain very challenging.

‘With little prospect of short term improvement in market conditions, we will focus on remaining competitive and protecting our capability, working with clients to reduce their overall costs, increase efficiency and safely improve performance.’

Half-year figures at the engineering firm revealed a near 20pc fall in revenue to £1.95bn and pre-tax profit fell 31pc to £102.3m. Cost savings in the first half reached £25m and analysts said this was better than expected.

Analysts at Numis said its cost cutting has mitigated ‘the effect of volume and pricing pressure’, adding: ‘The second half looks like a difficult operating environment for the sector, but gives investors’ confidence Wood Group is agile and responsive to market changes as it continues to flex its cost base’.

Alongside the half-year results Wood announced it has won a five-year contract with Royal Dutch Shell to provide services to four onshore oil fields in Gabon, west Africa.

Wood raised its interim dividend by 10pc to 9.8c (6.3p) a share. Shares rose 2p to 581.5p.