Engineering news
An engineering company which sells services to the oil and gas industry is to close, with the loss of more than 100 jobs.
AKD Engineering in Lowestoft, Suffolk, announced its intention to close the business from the end of June, following several years of “substantial” losses, compounded by the current downturn in the oil and gas sector.
Managing director Andrew Quayle said: “Despite a restructuring programme last year to keep the business going, market conditions mean that this is no longer realistic.
“Our thoughts are with our dedicated employees and their families and we will do whatever we can to assist them through this very difficult period.”
The 113 staff were told of the closure earlier this week. The firm has been in operation for 60 years, originally manufacturing diesel engines for the local shipbuilding industry, before becoming an engineering services provider to the oil and gas industry.
Trade association Oil & Gas UK said: “A number of companies are having to take hard decisions in light of the current challenging business environment.”
Miles Hubbard, regional officer at trade union Unite, said: “This is a massive body blow to the dedicated workforce and their families, and for the local economy.
“We will be seeking an urgent meeting with senior management to see what options may be available to save or relocate these jobs.
“This closure is an indication that nationally economic recovery is still very much centred on London and parts of the South East. We can ill afford to lose such skilled engineering jobs in this predominately rural area.
“We will be working closely with our members and all interested parties in the coming days and weeks to explore all employment opportunities for these workers.”
The oil & gas industry is responding to the low oil price with exploration budget cuts this year which will average 30%, said consultancy Wood Mackenzie. The organisation said the industry is addressing a long standing cost inflation issue, and that on average exploration costs will fall by a third, softening the blow of budget cuts.
Although overall well numbers will dip in 2015, Wood Mackenzie says drilling activity in 2016 is set to recover, as many explorers will seize their chance to drill at lower costs.
The Chancellor announced a series of measures to boost prospects for the North Sea industry in last month's Budget.
Production on the UK Continental Shelf is enduring a difficult time due to the near 50% drop-off in the oil price over the past year. Oil & Gas UK recently warned that critical infrastructure in the North Sea sector was doomed if the government did not act soon. The performance of the sector last year was its worst since the 1970s.
According to Oil and Gas UK, technologies to improve the recovery of oil and gas from the troubled North Sea industry will focus on small pools, innovations in well construction, and advances in inspection methods to manage the integrity of ageing facilities.