Capricorn Energy has announced job cuts which will see around 120 of its UK employees made redundant as it focuses its attentions on Egypt.
The Scottish oil and gas firm is “reviewing its UK office space requirements” after abandoning its merger with Israeli group NewMed.
Capricorn said it expects to have a “substantially reduced” headcount in the UK, resulting in an organisation of fewer than 40 people – a 75% cull.
The move comes amid industry unrest over the UK’s energy industry windfall tax, although Capricorn made no mention of the controversial levy.
Global headcount currently stands at about 240
The London-listed firm currently has around 240 global employees, and the cuts are being made as part of a review of its exploration and production portfolio.
Most of the job losses are expected in the next two months, and a further update is expected on April 27.
“As a result of the reduced headcount, the company will be reviewing its UK office space requirements to align to the expected size of the renewed organisation,” the firm said in a stock exchange announcement.
Capricorn, previously Cairn Energy, said recently the merger with NewMed was no longer tenable because of boardroom changes as well as a lack for support for the deal.
Investor Palliser Capital opposed the move, making accusations including “costly strategic pivots and capital allocation blunders”.
Edinburgh-based Capricorn is focused on Egypt, but also has small stakes in the UK North Sea.
These include interests in five licences alongside Deltic Energy.
Two-month redundancy window
Announcing the job cuts, Capricorn said: “In the earliest days of the strategic review, the board concluded Capricorn’s near-term strategic focus should be primarily on Egypt, and to farm down, monetise or exit exploration concessions outside Egypt.
“As a result, Capricorn will need a substantially reduced headcount in the UK and will, therefore, shortly enter a redundancy consultation process which is expected to result in an organisation of less than 40 people in the UK.
“Capricorn anticipates the majority of these changes will be made in the coming two months.”
The company was founded by a former Scottish rugby international, Sir Bill Gammell in 1980.
Its fortunes soared in 2004, when a field it had acquired in the Indian province of Rajasthan was found to contain close to 1.1 billion barrels of oil. The discovery catapulted the firm into the FTSE 100.
Cairn became Capricorn in 2021, the same year it sold large stakes in two UK North Sea fields – Kraken and Catcher to Waldorf Production UK.
The firm currently has production and exploration interests in the UK, Egypt, Mauritania, Mexico and Suriname.
Conversation