By Jonathan Davies

The oil giants Shell and Taqa will cut hundreds of jobs in the North Sea, the firms have announced.

Shell is cutting 250 jobs and reassessing its offshore shift patterns to cut costs. And Taqa is set to cut around 100 jobs as a result of what it called a "challenging" market.

Shell's upstream vice president for the UK and Ireland, Paul Goodfellow, said: "The North Sea has been a challenging operating environment for some time.

"Reforms to the fiscal regime announced in the budget are a step in the right direction, but the industry must redouble its efforts to tackle costs and improve profitability if the North Sea is to continue to attract investment."

He added: "Current market conditions make it even more important that we ensure our business is competitive.

"Changes are vital if it is to be sustainable. They will be implemented without compromising our commitment to the safety of our people and the integrity of our assets."

A Taqa spokesperson said: "Taqa's UK North Sea business, along with the industry as a whole, is operating in a challenging environment.

"As part of our focus to ensure Taqa's sustainable future in the UK, regrettably it is necessary for us to scale back the number of people working with us.

"The impact of these changes will predominately be on contractors and consultants.

"We are currently proposing a reduction of around 100 onshore positions, but the process will take a number of weeks and involve consultation with our workforce.

"Our workforce are fully informed on the proposed changes and we will work to support and guide them through the process."

Oil & Gas UK's economics director Mike Tholen said: "The new Oil and Gas Authority is progressing apace and the Budget announcement last week laid the foundations for the regeneration of the UK North Sea.

"As we said at the time, however, it is crucial that the industry itself now builds on this by delivering the cost and efficiency improvements required to secure its competitiveness.

"While these are tough decisions to take given the impact on people, the measures are being taken by many companies and will allow the UK to benefit in the long-term from a boost to energy security, hundreds of thousands of highly skilled jobs and billions of pounds worth of supply chain exports."

Earlier today (Thursday), oil prices increased by 6% after Saudi Arabia, one of the world's biggest oil producers, started launching airstrikes against rebels in Yemen.