European upstream independents backed by private equity (PE) — such as Chrysaor, Neptune Energy and Siccar Point — have led North Sea asset buying sprees in recent years, but Covid-19 is forcing them to reassess their strategies. PE investors — which typically look to exit their investments within a few years — have funded acquisitions of several mature and relatively high-cost assets ofshore the UK, Norway and other countries, resulting in independent producers growing rapidly. But Neptune now plans about 400 job cuts across nine countries “due to the combined impact of the Covid-19 pandemic and the anticipation of lower commodity prices for a longer period”. The frm says the redundancies will be split around 50:50 between staf and contractors. Neptune needs to reduce its payroll, despite having increased its lending facility, cut expenditure across the business by about 30pc and had its shareholders agree not to receive a dividend this year, chief executive Jim House says.
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