More than two thirds of oil and gas firms cut jobs last year, a faster rate than at any time the 25 years of the Oil and Gas Survey.
However, a similar number believes the rate of job cuts would begin to slow down. Six months ago, operators were predicting a 17% reduction in numbers which has fallen to 5%.
The survey, conducted by Aberdeen & Grampian Chamber of Commerce in partnership with the Fraser of Allander Institute, sought the views of 130 businesses, employing more than 308,000 UK staff.
The findings included:
- Operators reduced their workforce by 15% on average last year; for contractors the figure was 7%
- Expectations of further job cuts have eased during the year. Operators now expect to shed a further 5% of jobs next year while contractors predict a 1% reduction
- Two out of three respondents believe the sector has already reached the bottom of the current cycle, or will do so in the next year. A further 25% felt the low point would be hit within two years
- 43% had managed to reduce costs in the past year, many of them by as much as 10%
- A rising number of firms (40%) reported making significant changes to terms and conditions, including changes to shift patterns, working hours, pension contributions and other benefits
- 79% thought it possible they would be involved in decommissioning in the next three to five years, while 53% thought they could be involved in renewables
- 70% expected to be involved in unconventional oil and gas activity (fracking) in the UK
- Most firms (58%) felt the Brexit vote would have no impact but 31% expected it to have a negative impact
- 91% said the oil price fall since 2014 had a negative impact on their businesses
James Bream, research and policy director at Aberdeen and Grampian Chamber of Commerce, said: “We’re likely to remain in an uncertain position through 2017 and ‘the bottom’ will arrive at different times and feel different for each company.
“It is clear that companies are striving to become fitter, leaner and they are working hard to look for new markets to secure their future and employment levels where that is within their control.
“There is no question of complacency in the north east and our brilliant people will continue to demonstrate that the oil and gas sector should be considered a success story in generating economic value for the UK economy.”