More than 100 workers are facing redundancy as US energy service firm Baker Hughes looks poised to close one of its Aberdeen sites.
Baker Hughes said it was “proposing” the shutdown of its manufacturing base on Woodside Road, Bridge of Don.
A spokeswoman said “unprecedented market conditions” and a drop-off in demand meant the firm had to cut costs and restructure parts of the business.
North-east politicians described the news as a “hammer blow” and warned of a skilled jobs “crisis” in the region.
Baker Hughes’ move echoes rival firm Weatherford’s decision, reported in January, to close its manufacturing sites in the Aberdeen.
At the time, RMT regional organiser Jake Molloy warned other companies could easily follow suit without rapid action being taken.
Since then, the UK Government has agreed a transition deal with the North Sea oil industry, through which it pledged to support high-skilled oil and gas jobs during the move to net zero.
But Mr Molloy said today that “little or nothing” had been done to keep oilfield service companies ticking over in the short term.
He said the Baker Hughes facility would be a “major casualty” if it closed.
Baker Hughes said it was no longer possible for its Eastern Hemisphere business to operate four manufacturing facilities, given the lack of work.
The Granite City base appears the most likely to be phased out.
A formal consultation process has begun and staff members were informed yesterday.
The spokeswoman said decisions of this nature were “always difficult” and that Baker Hughes made them with the “utmost sensitivity” for employees, as well as customers.
She said: “The consultation will proceed for as long as necessary, in an effort to seek an agreement, before a final decision is made.”
It is understood that just over 100 people are included in the consultation.
Baker Hughes insisted it was “still fully committed” to Scotland and the UK long term and sees a role for itself in the energy transition.
The firm hopes to support the deployment of carbon capture, usage and storage technology at industrial clusters throughout the 2020s.
Baker Hughes also has north of 4,000 employees in the UK and supports more than 3,000 suppliers.
But earlier this month the company confirmed it was laying off more than 80 people at its subsea centre of excellence in Montrose in response to a reduction to it backlog.
A north-east facilities reshuffle announced earlier this year is unaffected.
The business said in April it was investing millions of pounds in two of its facilities in the region while vacating two others as part of a “relocation exercise”.
Mr Molloy labelled the potential Bridge of Don base closure as “shocking”.
He said there was plenty of “talk and rhetoric” coming from government and industry, but very little action taking place.
Mr Molloy said exploration work was unlikely to rebound to pre-Covid levels soon.
He argued that oil well decommissioning would help bridge the gap for some firms, but lamented that too many deferrals to this work had been permitted.
He said: “It’s just deferral after deferral when this is work that should be brought forward to support the supply chain, which continues to be in crisis.
“You cannot do a ‘just transition’ if you are not going to do the work.”
Industry chiefs said in March that several initiatives were under way to stimulate well plugging and abandonment work in the North Sea, including advertising opportunities to suppliers and requiring operators to draw up decommissioning plans for their well stock.
Stuart Payne, a director at the Oil and Gas Authority, said previously that the regulator was getting stricter with operators by setting time limits for when wells have to permanently abandoned.
A spokesman for the OGA said: “Job losses are regrettable and we sympathise with people impacted by this news.
“Operators are continuing to invest significantly in well decommissioning. While some work was rightly deferred last year due to Covid restrictions, nearly £400m was spent decommissioning 84 wells and operators are planning to recover lost ground this year, decommissioning around 200 wells.
“We’re working hard with industry to make sure that wells are decommissioned cost efficiently. Details of operators plans can be found on Energy Pathfinder.”
Stephen Flynn, the SNP’s energy spokesman, said: “We’ve seen thousands of jobs lost in the north-east since the oil price crash at the start of the pandemic and the cumulative effect of this must serve as a wake-up call for the UK Government.
“If our city and region is to thrive into the future then we need to be at the forefront of the race to create high quality sustainable jobs and, for that to happen, the UK Government needs to up the pace and open the cheque book.”
Gordon MP Richard Thomson – whose constituency includes the facility – said: “This news will still come as a devastating blow to the employees affected.
“Along with my MSP colleague Jackie Dunbar, I will be seeking an urgent meeting with senior management to discuss their announcement in early course.
“We will also be contacting the Scottish Government’s PACE Unit (Partnership Action for Continuing Employment) to ensure they are involved at an early stage in supporting the affected employees.
“While it is without doubt challenging times for the oil and gas sector, I would hope that other employers will recognise the valuable skills of the workforce at Bridge of Don and be keen to offer alternative employment.”
Scottish Conservative north-east MSP Tess White said: “This announcement from Baker Hughes is another hammer blow to the energy sector in Aberdeen.
“I contacted the Scottish Government when redundancy consultations were announced at the Montrose plant and I will be doing the same again to ensure help is given to the workers affected by this.
“To lose the Aberdeen base highlights a crisis in skilled jobs that must be kept in the north-east.
“This decision comes just months after Weatherford closed its manufacturing facilities in the city.
“It’s now vital everything is done to prevent a domino effect from occurring in Aberdeen.”
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