Industry

Redundancies at IGas in £1m cost cutting

190204 Misson Eric Walton 5

IGas site at Misson, Nottinghamshire. Photo: Eric Walton

IGas has announced redundancies, including the chief finance officer, in a £1m cost-cutting programme.

Julian Tedder, who has held the finance post for five years, will step down next month. His responsibilities will transfer to the group financial controller.

The company is also giving up the lease on its London office in September 2020.

Earlier this year, the company warned in its annual accounts:

“should oil price or demand (and therefore revenue) fall further, the Company may not have sufficient funds available for 12 months from the date of approval of these financial statements.”

In a statement to investors today, IGas said it had cut annual costs of about £600,000 so far this year. But it was now undertaking further reductions to save about £1m.

The company said it also proposed to reduce benefits and replace 15% of the salary for almost all board members and senior executives with share options.

The statement said:

“These measures are expected to reduce costs by a further c. £1.0 million such that from end of September 2020, our gross cash savings as compared to 2019 are anticipated to be c. £1.6 million per annum. The one-off cost of implementing these measures is c. £550,000 and will be incurred in 2020.”

The chief executive, Stephen Bowler, said:

“Like many other organisations across all sectors of the economy, we need to preserve cash and however difficult the decision, these are unfortunately very necessary steps which we need to take to be as well placed as possible for the future.”

Production resumes

IGas shut in a number of sites nearly two months ago when oil was trading at $25 a barrel.

Nine IGas fields have resumed production following an improvement in the oil price, the company said today. Some staff, who had been furloughed, have returned to work.

But the company said a further six sites, as well as the Albury gas-to-grid operation, remained shut-in, accounting for 320 barrels of oil equivalent per day (boepd).

Estimates downgraded

The company said it continued to be affected by supply chain interruptions, constraints on the availability of resources and well servicing issues.

“We estimate that the resultant project delivery delays and lower productivity levels will have an annualised impact of c. 150 boepd.”

IGas also downgraded its annual production estimates. In April, it predicted that 2020 production would range from 2,250-2,450 boepd. It now stands at 1,850-2,050 boepd.

39 replies »

  1. Is this yet another example of the dash for gas ensuring national security of energy supply?
    In a time of national crisis and economic uncertainty arising from Covid and Brexit IGas contracts and creates redundancies.
    Meanwhile renewables boom……

  2. There has to be one. Redundancies are not an issue to weaponize. Individuals are deeply impacted by such events.

    You may have missed the news, Jon, that redundancies are being applied to MOST sectors of the UK economy at the moment.

    • Not in the armed forces, police or security services.
      The dash for gas was sold as essential for our security.
      It was rubbish then and still is – onshore wind and solar are secure and unaffected by global oil politics and market forces.

      • Offshore wind and solar are for electricity. MOST Transportation, cooking and derivatives needs do not use electricity! Where do you think most of the FTSE dividends, pensions and ISA wealth come from which allows people and company’s to earn money, pay tax and sustain the armed forces, police and security services! Ahh yes the Labour Party’s’ money tree!! Educate yourself Jon!

      • Lat time I looked Jon, our armed forces relied pretty heavily on fossil fuels, as did our police and security services. (All paid for out of taxation. Redundant people pay reduced taxation.) Armed forces that have not had sufficient fossil fuel in recent history have fared pretty badly. (Mind you, I did hear of a police chase in USA that failed when the electric car ran out of “puff”!) Our NHS relies pretty heavily on fossil fuel, including back up generators, and our food would not be on our plates without fossil fuel either.

        Perhaps you, and Sarah, could watch the world stock markets and see how they react to movements in oil and gas supplies, demand and prices and the immediate impact that has on costs for EVERYONE in society. When that stops happening then oil and gas may be losing some importance, but unlikely to be in our time.

        China oil use already back to pre Covid levels. And, since I started this post, the world’s population will have increased even further. Until those two issues are coped with, the rest is tosh, attempting to get a few panicky individuals to do that instead of thinking.

      • Wind (onshore and offshore) and solar provide zero energy security at night in a windless high pressure weather event which hapens frequently because they provide negligible (ie almost zero) electrcity to the grid. So ramp up the gas…..

      • I am sure that those struggling to make ends meet in the face of possibility the biggest economic shock on record, will be comforted in the fact that they will continue to have to pay eight times more than necessary, because the renewable electricity sector is not subject to market forces.

    • ”Individuals are deeply impacted by such events.”
      I am so pleased that you are apparently now concerned about the impact on individuals, ”Mr Martin Collyer”.
      Just like the reported impact of fracking induced earthquakes on nearly 200 Lancashire residents ?

      • Is that the best you can do, Dr. Frank?
        Perhaps, when you have to take comments out of context to cobble together a post, it might be better just to construct the post unhindered by such? Perhaps dealing with the stress of redundancy is not your concern, or Jon’s. However, as this issue has been known to cause individuals to commit suicide, you could show a degree of compassion. Being made redundant in normal times is bad enough, but during a pandemic when new jobs are more difficult to come by, deserves compassion, at the very least.

        You might also read my post to Peter today, wishing him good luck, if his case was valid. However, not all reported impacts are valid. Ever heard of whiplash reports?

        • Mr ”Martin Collyer”,
          You have yet to respond to the points made in my recent summary?
          1.Whitehall’s spending watchdog found that attempts to establish fracking in the UK had cost the taxpayer at least £32m so far, without producing any energy in return.
          2.The UK’s only active fracking site at Little Plumpton was halted after multiple fracking induced earthquakes that breached government limits
          3. HMGov said it would not agree to any future fracking “until compelling new evidence is provided” that proves fracking could be safe.
          4.The OGA report also warned it was not possible to predict the magnitude of earthquakes induced by fracking.
          5. HMGov has also warned shale gas companies it would not support future fracking projects.
          6.The decision was taken after a new scientific study warned it was not possible to rule out “unacceptable” consequences for those living near fracking sites.
          And now relevant to Benedict Cummings ‘‘government by focus group’’
          7. Total support for fracking has fallen to a record low of 8%. This is two percentage points down on the previous survey, itself a record low.

          The above points, which you ”Mr Collyer” lamely state are ‘’subjective’’ are in fact irrefutable objective facts.
          Doubtless, devout pro-frackers, such as yourself, will continue to say these points are subjective. But they are what we rational people prefer to call ‘’true’’.
          [Edited by moderator]

          • [Edited by moderator]
            For all your selective posts, Dr. Frank, you ignore that over 50% of those surveyed (Total, may be your term, but it was a survey) are NOT against fracking. So, I would be in that majority. I would be in that undecided chunk. I have NEVER stated on DoD that I support fracking. I have repeatedly stated that I support a full, and detailed, assessment of fracking in UK. That has yet to be achieved. It may never be achieved. But, if it was achieved, at least the “we” would be able to decide whether they supported, or not, based upon some real knowledge of the subject. The survey still shows that most admit they do not have good knowledge of the subject. I do not find that surprising based upon NO economic data being established. The only surprise to myself, is that apart from Nimbys, others can then decide they are strongly against with that rather large missing piece of information.

            (And to save you time, crying earthquakes, you might find that many were “stressed” BEFORE that event, as past DoD comments show quite clearly. Dirty wheels seemed to stress quite a few! The fantasy of selenium stressed quite a few more.)

            [Edited by moderator]

        • ”Martin Collyer”
          ”…Perhaps dealing with the stress of redundancy is not your concern”

          But did you show any concern for the residents of Lancashire, who suffered real stress following the fracking induced earthquakes ?

  3. But in spite of the optimism of some there is definitely a sign that oil is in trouble, renewables and alternative energy are gaining ground. Onshore gas and oil is fading in importance.

    • Onshore gas and oil is fading in importance?

      https://en.wikipedia.org/wiki/List_of_oil_fields

      Check out the biggest fields in the list – onshore or offshore?

      Ghawar (Arabic: الغوار) is an oil field located in Al-Ahsa Governorate, Eastern Province, Saudi Arabia. Measuring 280 by 30 km (174 by 19 mi), it is by far the largest conventional oil field in the world,[1] and accounts for roughly a third of the cumulative oil production of Saudi Arabia as of 2018.

  4. IGas!
    I bet they have paid more in taxes to our communities, police, armed forces and security service than the average acupuncturist…..!!

    • Whitehall’s spending watchdog found that attempts to establish fracking in the UK had cost the taxpayer at least £32m so far, without producing any energy in return.

    • You need to educate yourself. All the costs of oil exploration are set against any profits, they get tax relief.
      Similarly North Sea producers get tax relief for cleaning up defunct pipelines etc. The subsidy is enormous .

      • Have you ever received a tax rebate? Decades of tax receipts have deemed the oil operators to receive relief…. billions of pounds of oil and gas revenue have benefitted the UK.
        Renewables have received subsidies from the get go without them ever being in the position to produce profits and a contributing to the treasury… money out and it’s not even being invested in the UK!

        Maybe that’s the plan? The nimbys sabotage the UK for the economic benefit and industrial interests of other EU countries.

        • Happy to examine the evidence that renewable industries do not invest in the UK eg Siemens in Hull creating 2000+ skilled jobs?

          • In the last decade there have been between 250,000 and 320,000 employed in the UK oil and gas industry!

            2,000 skilled jobs at a Germany owned factory in Hull?? How do they power that factory, 100% renewable?

            • There are 1,000 people employed by Siemens in Hull. They only manufacture blades at the site, their promises of full turbine manufacturing faded away. Have a check on their website.

        • Your Point is?
          Public money is used to protect sites from protesters, if we had peaceful protesters then there would be no need to fund the police for protection from these said protesters, Fact!

          • Eli-Goth
            But ‘only’ £13 million pounds was used to protect sites. HMG (and Tory MPs) apparently now accept that if fracking is recommenced, then further protest seems inevitable. Fracking is unpopular.

            That is one of the reasons why our nation’s leader, Dominic Cummings, has instructed his spokesman to withdraw support from fracking.

            https://www.theguardian.com/environment/2019/nov/02/fracking-banned-in-uk-as-government-makes-major-u-turn

            As reported above: The total cost (including the £13m) to the UK tax-payer to support fracking has been more than £32m.

            • So Dr how do you recommend we power the UK for the future and not drive our poor citizens in to the future with false hopes of an unreliable renewable industry, this does not give sustainable job security, taxable income and you cannot power everything with only electricity.., so renewables subsidy’s will be at the end of their lives come the end of the next decade.., I agree there needs to be alternative energy, but you cannot switch off Gas tomorrow… you are, I believe thinking about the future generations and not in you own narrative!! Once we loose a foothold of our own energy production we are at the mercy of global reserves!, so stuff the rest of the worlds landscape aslong as the minority in the UK are happy!

              Fracking is unpopular, but to all who have been surveyed. The true belief is we cannot life without energy! Try working and living in many countries when this is not an option!!

              • Yes, Eli-Goth.
                We can both agree on.the crucial requirement for more alternative/ renewable. energy,
                Rather than on fracking, that > £32m of tax-payer’s money, would have been far better spent on investing in renewable electricity, or more research into, or development of, efficient battery storage, such as the Manchester project ?

              • Bio-fuel from food waste and agriculture?
                Paul Tresto has given some idea of enormous conventional gas reserves – but the Saudis are going for renewable solar energy too. Why would they if it wasn’t viable?

                • The Saudis aren’t interested in installing solar on viability or environmental grounds. Their interest is motivated by a desire doing to cut domestic consumption as at present they burn approximately 25% of the oil they produce to generate electricity. With electricity demand increasing at 7% a year, it makes sense for them to seek alternative generating methods and free up more oil and gas to sell abroad. However their plans have yet to be matched by their progress and achievements.

                • The Saudis use a lot of solar energy to power their facilities in the interior which process and pipeline their oil and gas to market, this is not a shift in policy more a “we have sun so make the most of what can benefit”! Shame solar panels cannot help the UK during the winter months, better dash and use gas…, and the wind doesn’t blow 24/7!

                  Scotland has over 25% of Europe’s wind energy potential.

        • Expect Martin Collier and Eli-Goth will provide the evidence of police costs to protect wind farms and solar farms. Can’t wait.

          • It is the antis who produce the costs, Jon!

            Not a very wise move on your behalf. If you are concerned about those costs then you know what to do-or not.

  5. Rip Van Goth appears to have not checked the news recently. There has been an election and the Tories have found a magic money forest in addition to the huge subsidies paid to the oil and gas industry during the years of austerity.

  6. Notice that none of the fossil fools have explained how are national fuel security has been supported by the unprofitable and unsuccessful UK frackers.
    We are living through a major world crisis and petrol and gas prices are low.
    The global market does not reflect your attachment to oil and gas.

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