Report: Oil Price Slump Hits 120,000 UK Jobs

Jobs supported by the UK’s offshore oil and gas industry will have fallen by the end of 2016 by an estimated 120,000 since their peak in 2014, according to new data published by industry trade body Oil & Gas UK.

The analysis, carried out by marketing services company Experian, forecasts that in 2016 just over 330,000 jobs in the UK will be delivered through or supported by oil and gas production.

Brent crude is currently trading at around $50 a barrel, less than half the price it was in 2014 when jobs linked to the sector peaked at over 450,000. Jobs supported fell by an estimated 84,000 to around 370,000 in 2015, and are forecast to have fallen a further 40,000 by the end of this year.

Deirdre Michie, chief executive of Oil & Gas UK, said: “We cannot underestimate the impact the global downturn in the industry is having on the UK economy, nor the personal toll for those who have lost their jobs, and the effect on their families and colleagues. We recognise this and are doing everything we can to support these people, working with the UK and Scottish Governments through their task forces to find suitable alternative employment, as well as with the unions as we go through these difficult times.

“The industry has been spending more than it is earning since the oil price slump towards the end of 2014. This is not sustainable and companies have been faced with some very difficult decisions. To survive, the industry has had no choice but to improve its performance. It is looking to find efficiencies to restore competitiveness, to attract investment and stimulate activity in the North Sea. With up to 20 billion barrels of oil and gas still to recover, this region is still very much open for business.”

The industry will be coming together next week at Oil & Gas UK’s Annual Conference in Aberdeen to consider how it manages its way safely through the current downturn and how it can emerge in a competitive form that will safeguard the 330,000 plus jobs it still supports.

“330,000 jobs is still a significant number,” adds Deirdre Michie, “but the total employment we will sustainably provide depends on the level of investment attracted into the basin. If investment falls, then so will jobs. The interventions we make now will be critical to shape the industry’s direction and help stem future losses.

“Everyone in the sector can play a part. Effective workforce engagement is vital onshore and offshore, as is greater cooperation – within teams, within companies, across the industry and with the Regulators and Governments. Competitiveness is improving as a result of the work the sector is doing in this area – and is being reflected in the reduction in unit operating costs from almost $30 a barrel in 2015 to around $17 this year. But to protect our industry and the skilled jobs it provides we need to see further efficiencies. The work of companies and of the industry’s Efficiency Task Force needs to focus on ensuring that the changes being put in place are sustainable for the future that we all need to work towards.

“It is also important we consider what we can do in the immediate term to stimulate activity in support of exploration and development of existing small pools opportunities to help support the supply chain as it goes through these challenging times.”