120,000 jobs to be lost in oil downturn – report

Oil & Gas UK chief executive Deirdre Michie

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, by marketing firm 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 oil and gas sector peaked at more than 450,000.

Jobs supported by the UK oil and gas sector 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 2016.

Deirdre Michie, chief executive of Oil & Gas UK, said: “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’s leaders will meet next week at Oil & Gas UK’s annual conference in Aberdeen to consider how it can emerge from the downturn in a way that will safeguard the 330,000-plus jobs it still supports.

“330,000 jobs is still a significant number,” said 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.”