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Apache to make fresh round of Aberdeen job cuts

The US oil firm suspended North Sea drilling earlier this year, blaming the windfall tax.

Apache's offices in Kingswells, Aberdeen.
Apache's offices in Kingswells, Aberdeen. Image: Kami Thomson/DC Thomson

Oil firm Apache has started a consultation on a fresh round of job cuts in its North Sea business based in Aberdeen.

The operator said it was offering voluntary redundancy to staff.

This is the main focus of a consultation to “streamline the business in Aberdeen”.

A “maximum” of 90 redundancies could be made in Apache’s offices at Prime Four business park in Kingswells.

But the firm stressed this is just “one speculative scenario”.

Windfall tax blamed

It said the energy profits levy (EPL) – or windfall tax – from the UK Government had made it “very challenging” for it to “operate in the same capacity as it has in the past”.

Apache decided to suspend drilling in the UK earlier this year, citing the windfall tax.

About 30 people were made redundant in June.

The focus of this latest round of job cuts is on the onshore side of the business.

Apache's offices in Aberdeen.
Image: Kami Thomson/DC Thomson

Apache confirmed it has than 600 people in its North Sea operation. As of last year, according to accounts published at Companies House, it had 634 staff in the business.

More than 400 of these were based offshore.

A spokesperson for the US-headquartered company said: “Following the decision in June to suspend all platform drilling in the North Sea, due to the challenging UK fiscal regime and unstable investment climate, we have since completed a comprehensive assessment of our North Sea business.

‘Late-life operating model’

“We are focusing on safely managing base production, controlling costs and optimising operational efficiency. This will help ensure a viable and sustainable business for the future as we evolve our assets to late life operations.”

The spokesperson added: “To streamline the business in Aberdeen we are entering a consultation process, which will include a voluntary redundancy programme, to align the onshore organisation with the current business needs.

“Implementing a late-life operating model will ensure Apache North Sea’s sustained success as the business becomes a cost-effective leader in late-life asset management, driven by talent and innovation.”

forties alpha
Apache’s Forties Alpha platform.

The government upped the windfall tax on North Sea operators to 35% in November 2022, taking the headline rate of taxation to 75%.

Apache said in June it was “reassessing investments” and had suspended all drilling, including work at its key Beryl and Forties hubs.

Industry experts have warned this goes against the industry regulator’s maximising economic recovery mandate, saying a sale of the Apache North Sea business is “likely”.

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