Thousands of offshore catering workers are to be balloted over possible industrial action after an expected pay rise was cancelled.
Around 2,000 members of the Unite and RMT unions were told by the Caterers Offshore Trade Association (COTA), which represents six separate catering companies, that the 2% rise planned for 2015/16 will not be paid on Wednesday.
Employees were told the news on the same day that Chancellor George Osborne announced a £1.3 billion tax break to the UK's offshore oil and gas industry.
A consultative ballot of union members will now gauge support for industrial action.
A North Sea leader has warned that more jobs will have to be cut in the sector despite a “regeneration” package announced in the Budget.
Malcolm Webb, chief executive of Oil and Gas UK, said the industry must put pressure on itself to reduce costs and improve efficiency, but urged firms to do it in a “careful” way.
He was speaking the day after the Treasury met demands for greater support during the downturn, announcing cuts to the supplementary charge, petroleum revenue tax and incentives for exploration.
Scottish Secretary Alistair Carmichael claimed on Wednesday that the measures would help protect thousands and potentially tens of thousands of jobs.
However, Mr Webb said there were still difficult decisions to be taken in the offshore sector.
Aberdeen-based oil and gas firm Seafab has ceased its operations due to “insurmountable” cash flow problems brought on by the crude price collapse.
The price of oil has fallen by about 50% since last summer due to chronic over-supply, prompting energy companies to resort to drastic belt-tightening measures, often at the expense of employees.
Those at Seafab are the latest casualties. The service provider’s 23 staff members at its facility in Dyce have been made redundant.
Falling oil revenues mean Scotland would face a “devastating” £7.6 billion of cuts if it had to raise all the cash it spends, Labour has claimed.
The party’s Scottish deputy leader Kezia Dugdale had previously claimed the country would be some £6.5 billion worse off if there was a change to the way funds are allocated throughout the United Kingdom.
But after the Office for Budget Responsibility (OBR) yesterday revised down the amount of money it predicted North Sea oil revenues would raise, she said the impact was even greater.
Public cash is currently distributed across the UK using the Barnett formula, but the SNP wants Scotland to have full fiscal autonomy - meaning it would have to raise enough in taxes and borrowing to cover all its spending.
Ms Sturgeon told Holyrood the Scottish Government would publish a new bulletin setting out its latest forecasts for oil revenues “as soon as possible”.
But Ms Dugdale said plans for full fiscal autonomy had been based on significantly higher oil prices of 110 US dollars (£74) a barrel.
Signs that US interest rates will rise at a slower than expected pace pushed the FTSE 100 Index to a new record in the wake of yesterday’s Budget rally.
London’s top-flight reached 6982 in early trading before falling back towards it opening mark at 7.5 points higher at 6952.4.
The value of London’s leading shares climbed by 1.6% on Wednesday after the Chancellor confirmed tax breaks for the beleaguered North Sea energy industry as well as a boost for house builders with help for first-time buyers.
EnQuest could invest more money in some of its North Sea fields after the UK Chancellor revealed a raft of measures to help the industry.
The company’s chief executive welcomed the changes which he said would give more value to their North Sea assets.
The Budget changes included a reduction in the supplemnetary charge from 30% to 20% as well as a reduction in the PRT (Petroleum Revenue Tax) from 50% to 35%.
An offshore worker has been airlifted to hospital from a North Sea platform following a medical emergency.
The crewman was working on the Tiffany platform which is 155 miles north east of Aberdeen.
A Bond 1 helicopter from the Miller Platform flew to the Tiffany platform after the alarm was raised.
As the Budget is announced this week, Derek Leith, UK head of oil and gas taxation at EY, has taken up the role of Energy Voice’s guest editor. Follow along each day as he spells out the challenges and triumphs the industry faces.
Following the Chancellor’s final Budget for this Parliament much of the commentary focuses on the further welfare cuts apparently implicit in his fiscal projections. Although those of us in the North East of Scotland are interested in these matters, our more likely pre-occupation is trying to understand the likely impact of the changes to the North Sea fiscal regime.
On balance, I think the changes announced yesterday were at the top end of realistic expectations of what the Chancellor might do.
Industry body Subsea UK has welcomed the measured in the UK Government's budget to help support the North Sea oil and gas industry.
George Osborne said there would be the introduction of a “single, simple and generous” tax allowance for the industry from next month, with the Government also investing in new seismic surveys in under explored areas of the UKCS (UK Continental Shelf).
The OBR (Office for Budget Responsibility) has assessed that it will boost North Sea production by 15% by the end of the decade.
As previously hoped, the supplementary tax has been reduced from 30% to 20% – which the Chancellor said will be backdated to January of this year.
Premier Oil has told staff that it plans to reduce its headcount by 10% due to the drop in oil prices, with about 20 full-time employees in Aberdeen likely to be affected.
The London-headquartered company is also expected to start decommissioning work on its Balmoral rig, which has been operating in the North Sea since 1986, because it is no longer profitable.
Premier Oil last month said it suffered losses of £250million in 2014, blaming the disastrous result on the crude price drop and impairment charges of £210million relating to its North Sea fields.
North Sea helicopter provider CHC has chalked up losses of £1.4million due to the grounding of its fleet of Airbus-made EC225 Super Pumas.
The Canadian company yesterday said the temporary suspension of its EC225 fleet had an “adverse effect” on its results for the year ended 30 April 2014 when pre-tax profits fell 60% to £3.3million.
Turnover rose 1.19% to £180million for the year due to contract wins and efficiencies, the firm said.
Industry expert Peter Gaffney warned the oil and gas industry not to begin decommissioning in the North Sea too early as oil prices decline.
The co-founder of Gaffeny Cline & Associates was in Aberdeen to speak at an event which sees more than 200 delegates fro across the world come together.
He sat down with Energy Voice during the Aberdeen - Houston Gateway to discuss where he sees the industry heading as it rebounds from declining prices and higher production costs.
The Treasury certainly has been listening to the woes of the UK’s offshore industry, battered by the deadly impacts of collapsed global oil prices global oil prices and a fiscal regime that was totally unfit for purpose.
Osborne, Alexander & Co have come up with a package of fiscal changes that definitely improve the situation. But do they go far enough?
Oil & Gas UK’s chief executive Malcolm Webb certainly comes across as pleased in his initial statement; whether that view will be tempered once the measures have been fully digested remains to be seen.
However, Alan McCrae, head of energy tax at PwC is an example of someone who is less sure. While acknowledging that the changes are for the better, his view matches mine ... that more should have been offered.
The North East needed a big confidence boost from the Chancellor yesterday when he stood up to give his budget.
I believe that the tax cuts for the oil industry he announced plus the government’s support for a city deal for Aberdeen and Aberdeenshire gives us just that.
As the north-east's most prominent oil and gas business figure Sir Ian Wood said, the Budget has provided an "essential lifeline" which "should help restore confidence."
In short, it shows the North East is open for business with boosts to the economy, industry and infrastructure.
Energy specialist corporate finance firm Simmons & Company International said measures taken by the UK Government have fallen short of the 'radical shot in the arm' the UKCS (UK Continental Shelf) needs.
The company said the changes were a move in the right direction, but said the North Sea oil and gas industry still faces higher levels of taxations compared to other industries.
Changes include a 10% reduction in the supplementary charge, while the PRT (Petroleum Revenue Tax) is also set to be reduced from 50% to 35% to support continued production in older fields.
The Scottish Trades Union Congress (STUC) has welcomed the reforms introduced by the government in the budget - but said the current oil price meant it wasn't optimistic about ensuring job safety.
General Secretary Grahame Smith said it supported the steps taken by the Chancellor George Osborne including a reduction of the supplementary charge from 30% to 20%.
However while the current price remained at just above $50, there was still uncertainty regarding jobs.
Industry body Oil and Gas UK have hailed the North Sea package introduced by the Government as “sensible and far-sighted”.
Chief executive Malcolm Webb, said: “Today’s announcement lays the foundations for the regeneration of the UK North Sea. The industry itself must now build on this by delivering the cost and efficiency improvements required to secure its competitiveness.
“These measures send exactly the right signal to investors. They properly reflect the needs of this maturing oil and gas province and will allow the UK to compete internationally for investment.
“We also welcome the Government’s support for exploration announced today. With exploration drilling having collapsed to levels last seen in the 1970s, the announcement of £20 million for the newly formed Oil and Gas Authority to commission seismic and other surveys on the UK continental shelf (UKCS) is a very positive step.
The UK's biggest organisation representing contractors, consultants and other workers in the oil and gas industry has backed the measures introduced by Chancellor George Osborne.
The IPSE said the cuts would further encourage investment within the North Sea.
In the 2015 budget, Chancellor George Osborne agreed to cut the supplementary charge from 30% to 20% as well as the PRT (Petroleum Revenu Tax) from 50% to 35%.
As the Budget is announced this week, Derek Leith, UK head of oil and gas taxation at EY, has taken up the role of Energy Voice’s guest editor. Follow along each day as he spells out the challenges and triumphs the industry faces.
At last some welcome news for the UK oil and gas industry with the Chancellor’s announcement today of a reduction in supplementary charge to 20%, the introduction of the Investment Allowance and a cut in the rate of petroleum revenue tax (PRT) from next year.
The reduction in supplementary charge to the pre 2011 rate of 20% was the minimum meaningful reduction that the Chancellor could make to demonstrate that he wants to move to the new reality of taxing the sector in a manner that focuses on the macro-economic benefits to the UK economy, and not simply on maximising revenue from production taxes.
The Government is backing plans for a £1 billion world-first scheme to provide green energy from the tides of the Severn Estuary.
In a budget that also supports fossil fuels with £1.3 billion of tax breaks for North Sea oil and gas, George Osborne said the Government was opening negotiations on subsidies for the world’s first tidal lagoon power plant in Swansea Bay, South Wales.
The scheme would involve a six-mile (9.5km) wall built around Swansea Bay to create a lagoon with turbines that can harness the incoming and outgoing tides to generate power 14 hours a day, providing renewable electricity for 155,000 homes for 120 years.
As the 2015 budget is announced by Chancellor George Osborne, Energy's Editor Jeremy Cresswell gives his initial reaction to the measures which will be put into place for the North Sea oil and gas industry
Looks like Treasury was listening.
Obviously the single, basin-wide tax allowance was expected. So too the seismic survey allowance, which could prove a strategically shrewd move.
The UK Chancellor has announced a raft of measures worth £1.3billion to help boost North Sea oil and gas industry.
George Osborne said there would be the introduction of a "single, simple and generous" tax allowance for the industry from next month, with the Government also investing in new seismic surveys in under explored areas of the UKCS (UK Continental Shelf).
The OBR (Office for Budget Responsibility) assessing that it will boost North Sea production by 15% by the end of the decade.
Norwegian operator Statoil has made a gas discovery in the Snefrid Nord prospect in the Norwegian Sea.
The discovery well 6706/12-2 was drilled by Transocean Spitsbergen and proved a 105-metre gas column in the Nise Formation.
Statoil has estimated the volumes discovered to be in the range of 31-57million barrels of oil equivalent.
More than £4.7billion worth of UK North Sea assets are up for sale as high costs and the oil price collapse put their owners’ balance sheets under pressure, a report has found.
Oil and gas consultancy 1Derrick said that the number of North Sea oil and gas assets on the market has increased to 41 from 30in 2013.
But deals have been slow to progress, with 21% of assets staying on the market for more than a year in 2014, up from 13% in 2013, according to the firm.
John Swinney has urged the Chancellor to ditch his “fundamentally flawed“ economic policy and call an end to “deep spending cuts”.
The Deputy First Minister also demanded George Osborne use his pre-election Budget to bring in a package of measures to help the North Sea oil and gas industry.
Scottish Conservative leader Ruth Davidson and shadow Scottish Secretary Margaret Curran also joined in demands for Mr Osborne to take action in the wake of the “emergency in the North Sea”, where plunging oil prices have seen firms cut staff.
Holyrood ministers have been urging the UK Government to reverse previous hikes in the supplementary charge, which is paid by the sector.
