The North Sea oil and gas industry is set suffer a net loss 23,000 jobs over the next five years – more than 4,000 a year every year to 2020 – with many of these expected to go in Aberdeen and Grampian areas.
The report – ‘Fuelling the next Generation’ – forecasts that a total of 35,000 jobs will be lost by 2019 as oil exploration and recovery operations decline and new fields become harder to find and commercially exploit.
But over the same period, the industry is forecast to recruit some 12,000 new people into the maturing sector, according to an in-depth analysis commissioned by the London-based Oil and Gas UK trade body and the UK Dept. for Business, Innovation and Skills.
Gordon Ballard, co-chairman of the Oil and Gas Industry Council, said: ‘Fuelling the next generation’ paints a detailed picture of the UK’s current and future upstream oil and gas labour market, and contains unique insights that will allow us to look at ways of addressing the issues affecting the industry.
“For example, while 70% of respondents said they were experiencing difficulties to recruit, it seems the scale of the shortage is less pronounced than 12-18 months ago, and is limited to specific areas such as Technical Safety, Drilling Engineering, Geosciences and Business support services.
“Most of these are in Aberdeen.
“A key message from this report is that oil and gas is a young sector, with strong opportunities for new entrants. It currently employs 1 in 80 of the UK workforce at an average annual salary of £64,000.”
Over the next five years, total employment is expected to fall, but there will still be opportunities for 12,000 new entrants. While investment in the North Sea is likely to decline, the impact should be offset in part by growing supply chain opportunities in export markets, the need to decommission North Sea assets, and new prospects for an onshore shale industry.
Matthew Hancock MP, UK Business Minister commented: “Although over the next five years, total employment is expected to fall as investment in the North Sea begins to naturally decline, the report also highlights that this impact should be offset in part by growing supply chain opportunities in export markets, the need to decommission North Sea assets, and new prospects for an onshore shale industry.”
Ballard added: “The recent fall in oil prices has brought home the challenges ahead, but now more than ever the industry needs to stay the course and continue to invest in developing its own – not repeating the mistakes from the 1980s and 1990s.
“The number of employees supported by the industry stands at 375,000. We applied a number of drivers to estimate future employment demand over five years; this places the 2019 workforce at 340,000 – driven primarily by a significant decline forecast in N. Sea oilfield investment.
“Looking ahead, estimates suggest remaining reserves within the UKCS could provide energy for at least another 35 years. Over the next five years, over 12,000 new entrants will be needed to replace skills and retiring older workers.”