Region’s energy firms warned of risks in the face of uncertain future - as oil crisis deepens

Danny Lawson/PA Wire

Danny Lawson/PA Wire - Credit: PA

Energy firms have been warned to reorganise or risk an uncertain future in the face of an ongoing international oil crisis.

Oil and Gas platform

Oil and Gas platform - Credit: Archant

Companies operating in Great Yarmouth and Lowestoft have announced further job cuts while employees at one firm have been invited to take unpaid leave.

The latest firm to announce a 'reorganisation' is Petrofac, although the majority of jobs at risk are expected to be in Aberdeen, leaving the 160 employees in Great Yarmouth largely unaffected.

And Great Yarmouth-based 3Sun said it had given its more than 340 staff members the option to take unpaid leave during the next three months, in a bid to mitigate any further action.

Oil prices have fallen to about $38 a barrel, down from $110 a barrel in 2014, while gas prices have dropped to 33p per therm, down from about 50p per therm a year go. The falling prices have sparked a sharp drop in the number of available contracts for the region's supply chain companies.

Mark Goodall from New Anglia LEP. Picture

Mark Goodall from New Anglia LEP. Picture - Credit: Matthew Usher

It comes as hundreds of jobs have already been lost in Yarmouth and Lowestoft since the oil price fell in December last year.

Mark Goodall, leader of the New Anglia LEP's oil and gas task force - which helps and advises businesses affected by the crisis - said the bottom line was that the oil and gas industry had to reorganise itself to be sustainable for the future.

Most Read

'Unlike previous downturns this one has come following a peak and so is being felt even more,' he said. 'Companies have got to do the right thing rather than not doing anything and getting into difficulty.

'They have to make the changes now so they are sustainable in the future and hope to be in a position to employ again when things improve.'

The latest string of blows follows a series of announcements earlier this year from the region's energy sector.

Lowestoft-based AKD Engineering, a metal fabrication business for the oil and gas industry, blamed 'market conditions' for its decision to close the business in April. Some 113 skilled staff lost their jobs.

Administrators were called in for the oil and gas services firm Red7Marine Group in July and 280 people lost work, due to a 'significant strain' on cash flow.

Global energy industry services firm Proserv confirmed it was reviewing staffing levels at its four sites in Great Yarmouth, while Great Yarmouth-based marine services company Gardline has also made redundancies.

Earlier this week Shell announced its multi-billion pound deal to buy oil and gas firm BG Group was set to lead to 2,800 job losses.

After a letter was written to employees offering the option to take time off in the first part of 2016, 3Sun chief executive Graham Hacon said: 'The response to this process has been overwhelming and the majority