Hundreds of Scottish jobs could be at risk after oil giant Shell confirmed its biggest drop in annual profits for 13 years.

Shell plans to shed 10,000 jobs as a result of an 80% fall in profits and plans to sell off around £20.6bn worth of assets.

The oil giant, which has already cut 500 North Sea jobs, employs around 5500 staff and contractors in Scotland

Meanwhile, EnQuest has announced plans to cut 45 North Sea jobs as the price of oil continues to hover at around $30.

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Shell indicated towards the end of last year that it would cut jobs in the wake of a $49bn (£34bn) takeover of the BG Group.

The blue chip giant saw full-year earnings tumble to $3.8bn (£2.6bn) in 2015 from $19bn (£13bn) in 2014. On an underlying basis, full-year earnings fell 53% to $10.7bn (£7.3bn).

Shell, which had braced the city for a sharp fall in figures last month, said it had been slashing costs and leading an overhaul to offset the oil price rout, but added it was ready to take further action if needed.

Chief executive Ben van Beurden said: “The completion of the BG transaction, which we are expecting in a matter of weeks, marks the start of a new chapter in Shell, rejuvenating the company and improving shareholder returns.”

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The group stripped out $4bn (£2.7bn) from the business, around 10%, in 2015 and plans to cut a further $3bn (£2.1bn) this year.

Mr van Beurden added: “Shell will take further impactful decisions to manage through the oil price downturn, should conditions warrant that.”

Deirdre Michie, chief executive of Oil and Gas UK, said: “The falling oil price and increasing industry costs have seriously impacted on activity across the UK Continental Shelf.

“While Oil and Gas UK cannot comment on the commercial announcements of its members, companies are having to make difficult decisions in the current climate.

“The industry is focusing on improving its efficiency and cost. We also welcome recent announcements by the UK and Scottish Governments of support for our industry and we will continue to work with the Scottish Energy Jobs Task Force and other organisations to try to ease the impact of these tough times.

“With up to 20 billion barrels of oil and gas remaining to be extracted, the North Sea still very much has a future but we need to need restore competitiveness to the basin in the long-term so that we can emerge from this downturn in robust shape.”

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