Oil and Gas Sector Downturn ‘Has Cost 65,000 British Jobs’

September 14, 2015

The contraction of Britain’s oil and gas sector in recent quarters has resulted in the loss of 65,000 jobs around the country, including many in Scotland, according to a prominent trade body representing the industry.

A reduction in revenues among oil and gas firms has left businesses across the industry having to reduce costs quickly and needing to shed jobs in the process.

Scotland’s energy sector has been a major contributor to the national economy but recent years have seen a significant downturn in the number of jobs supported by the industry.

According to the trade body Oil and Gas UK, the number of people employed directly or indirectly by its members has fallen from 440,000 to 375,000 since the beginning of 2014.

“Difficult decisions have had to be made across the industry,” said Oil and Gas UK’s chief executive Deirdrie Michie.

“We estimate that employment supported by the sector has contracted by 15 per cent since the start of 2014 to 375,000 jobs. It is likely that capacity may have to be reduced still further in order for the business to weather the downturn.”

As part of its annual economic impact report, the oil and gas trade body called for tax cuts to be afforded to the industry and for Treasury incentives to be offered to help boost investment around the country.

At present, estimates and expectations are that there will be a reduction of up to £12 billion in the amount of money being invested within the UK’s oil and gas sector during the next three years.

Costs across the industry have been cut by around 8 per cent this year and are expected to be trimmed by a further 14 per cent next year, according to Oil and Gas UK’s latest figures.

At the heart of the problems for the UK’s oil and gas sector operators, which employ many thousands of people in Scotland alone, has been a sharp downturn in the prices paid internationally for energy resources.

In particular, the fact that Brent crude oil now sells for around half the price it did 12 months ago has been a serious source of difficulty for British businesses in the energy industry.

John Baird

Insolvency Adviser

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