The UK North Sea is not performing the way it used to, and this has many oil and gas contractors worried as the country’s major oil and gas operators are looking to slash up to 120,000 jobs, according to the industry’s trade body, Oil and Gas UK.
Oil and Gas UK has said that this move will result in a 25 per cent reduction in the workforce since mid-2014, which is when the global oil prices started to freefall. UK oilfields in the North Sea have been particularly affected by plunging oil prices since they have some of the highest exploration and production costs in the world.
Shell has already announced that it will be reducing a further 475 jobs in its UK and Ireland upstream businesses. This is part of Shell’s worldwide efforts to reduce the company’s workforce by 12,500 between 2015 and 2016.
Other major oil and gas companies in the UK, such as Chevron and BP, have also announced that they will be reducing their workforce substantially with the aim to reduce their operational costs. These announcements did not go down well with oilfield workers and oil and gas contractors.
Oil and Gas UK Chief Executive Deirdre Michie stated that the total employment that the sector will provide depends mainly on the amount of investment that the UK North Sea can attract. She went on to explain that when investments reduce, it will affect jobs as operators will be forced to decrease the number of directly employed workers as well as workers in the supply chain and through oil and gas contractors.
The latest figures reveal that the number of jobs cut in 2015 was around 84,000, and another 40,000 jobs will be slashed in 2016. It is expected that by the end of 2016, the oil and gas sector in the UK will support about 330,000 jobs.