Recession drills deep into oil and gas

Job cuts have been the dominant theme in British business over the past three months. And the energy sector has been one of the most badly hit industries as a result of the volatile oil price.

At the end of October, BP chief executive Tony Hayward warned that “productivity and efficiency” drives would result in “materially higher” redundancies than the 5,000 the company had already announced. One former BP executive says there is anecdotal evidence that BP is pushing through an early retirement programme, citing five friends who have recently taken up the scheme. BP denies there is an emphasis on early retirement, but there is little doubt that oil and gas companies will in the short term replace few staff who leave in the next few months.

Among the hardest hit will be contractors that provide services to oil and gas firms. For example, Senergy is understood to have been developing a $19m (