Well-Safe Solutions is planning cuts up to a tenth of its workforce as work to decommission North Sea platforms hits the doldrums.
The private investor-backed company said the slowdown in business is a “knock on effect” of the Energy Profits Levy (EPL).
Recently the UK Treasury confirmed plans to end the so-called windfall tax by 2030, but for many companies the damage in form of job losses and investment decline will have been done by then.
The cuts come as Harbour Energy, the North Sea’s biggest independent oil and gas operator, warned it has to pay a “108% effective tax rate” on its UK operations.
Well-Safe, which has invested millions in transforming old drilling rigs into units that can remove subsea oil and gas infrastructure, said it has to downsize its onshore team to “reflect the reduction in activity” this year. The firm employs around 400 people.
The company and its employees are currently carrying out a consultation in a bid to save as many positions as possible.
The consultation launched on one of its rigs, the Well-Safe Guardian, although two others are not affected.
Recently, former Well-Safe chairman Mark Patterson told an audience in Aberdeen the vessel has been “sitting in Cromarty Firth with no work for a year”, and cited concerns over the UK industry’s ability to fund decommissioning activity given the current North Sea fiscal regime.
“The governments, or the politicians, over the last few years have totally screwed the operators with windfall tax, so there’s no cash available, really, to go and do decommissioning,” he said.
Further challenges facing both operators and the supply chain in North Sea decommissioning including rising costs, while project timelines are often significantly delayed.
Meanwhile, the North Sea Transition Authority (NSTA) regulator is preparing to dish out fines and name and shame operators that are failing to meet decommissioning deadlines.
In 2019, Well0Safe secured a £66 million investment led by MW&L Capital Partners. This was to gear them up to pick up a forecast expenditure of £15.3 billion in the next decade on decommissioning in the UKCS.
A spokesman for Well-Safe Solutions said: “The knock-on effects of the Energy Profits Levy have seen spend delayed on decommissioning across the industry, which is affecting both our rig and engineering activity.
“It’s with regret that Well-Safe Solutions confirms its intention to reduce positions aboard the Well-Safe Guardian while it is on standby. We must also resize our onshore team to reflect the reduction in activity throughout 2025.
“We are currently going through a collective consultation process exploring options to safeguard as many colleagues as possible and are supporting them through this challenging time.
“It is proposed that 45 positions may be affected onshore. With the Well-Safe Guardian on standby, we will retain 34 positions onboard in readiness for our return to a client project.
“This is not a position we expected to find ourselves in, but we must make this hard decision now to protect the business ahead of an expected increase in global project availability for 2026 and beyond.
“The Well-Safe Defender and Well-Safe Protector are not affected by the current consultations. Well-Safe Solutions is continuing to deploy its personnel and assets onto relevant projects as we help our clients to realise their energy transition objectives.”
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