BOSSES overseeing a multi-billion-pound “mega-merger” of two giant oil companies were warned yesterday to beware “crude cost-cutting and job cuts” as a result of the deal.

Royal Dutch Shell has splashed out £47 billion to take over Britain’s gas and oil exploration firm BG Group.The deal, which is to be completed next year, is seen as a potential trigger for mergers of other oil giants.

But union Unite warned the two firms against any plans to use the merger to slash costs and axe jobs.

Unite said workers employed in Shell’s North Sea extraction operations are already facing a raft of job cuts.The union voiced concerns over the two companies’ talking of the need to achieve “synergies” and called for urgent assurances over jobs and skills.

Unite Scottish secretary Pat Rafferty said: “North Sea oil and gas is in the grip of a concerted attempt by the offshore industry to impose a race to the bottom on jobs, terms and conditions.

“People are already paying with their livelihoods because the big oil companies failed to put aside money for a rainy day when the sun was shining and oil prices were high. “This mega-merger should not be built off the back of crude cost-cutting and further job cuts which would only serve to be counterproductive over the long term. Both Shell and BG Group need to make commitments on retaining skills and give assurances over jobs.”

The deal boosts Shell’s oil and gas reserves by 25 per cent and its production by 20 per cent and comes at a time when the industry is searching for “efficiencies” and cost reductions in the face of the recent slide in energy prices. BG Group employs about 5,200 staff in 24 countries.

Shell is believed to have been attracted to the takeover by the potential of projects in Brazil and Australia.

BG — formerly British Gas — was one of Britain’s publicly owned utilities sold off by the Tories since 1979.