Oil price rises but North Sea jobs gloom deepens

OIL firms expect to have shed almost one in three of their North Sea jobs since 2014, a major report has revealed.

Despite speculation the price of oil could soon recover to more than $50 a barrel, the study suggests the future is still extremely gloomy in the Scottish oil industry.

The contraction of the North Sea operations has fed into the labour market figures which show Scotland’s jobs recovery has gone into reverse.

Unemployment increased by 8,000 between January and March to 169,000, according to the latest official figures.

But the conclusions of the 24th Oil and Gas Survey, by Aberdeen & Grampian Chamber of Commerce, suggest that in the year to March 31 oil firms reported a 15 per cent loss in their UK-based staff.

Despite predicting just six months ago that only a further six per cent of the workforce would be laid off this year, the estimate has now leapt to 17 per cent.

It takes the total loss of jobs across the sector to more than a third in two years.

Oil and Gas UK figures suggest a loss of more than 56,000 jobs supported by North Sea industry across the UK in the last year

There was more optimism in the survey about international activity and involvement in removing the industry’s footprint.

In the light of the downturn, around 85 per cent of North Sea contractors expect to see a rise in decommissioning work over the next three to five years.

But Uisdean Vass, an oil and gas lawyer with survey sponsors Bond Dickinson, said that could be an ominous sign.

“Although decommissioning will offer great opportunities it is like the funeral industry – we want to put it off for as long as possible,” he said.

Russell Borthwick, chief executive at Aberdeen & Grampian Chamber of Commerce, said despite the difficulties affecting the North Sea there had been a more optimistic outlook among workers.

“In the previous two surveys we carried out, we found confidence had hit record lows, with an all-time low in November 2015,” said Mr Borthwick.

“This time, while the figure is still firmly in negative territory, it has marginally improved, which may perhaps show we are near the bottom of the curve.”

Meanwhile a think tank has revealed Scotland’s job “surplus” of 7,000 in September to November 2015 had turned into a jobs “gap” of 52,000 in the three months to March this year.

Policy analyst Conor D’Arcy of the Resolution Foundation said: “Scotland’s employment rate has switched from being 1.5 percentage points higher than the UK figure immediately before the financial crisis of 2008, to being roughly 1.5 percentage points lower today.”

He said Scotland needed to create 52,000 jobs just to get back to where it was in 2008.



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