Main Menu

Call for collaboration

Lockdown decimates jobs in oil and gas sector

Brent oil field

Government is urged to work closely with the industry

Oil and gas workers took a big hit from the coronavirus slowdown with the number of offshore workers down by about 4,000 to 7,000.

Drilling and engineering construction trades were hardest hit as the UK went into lockdown in March, according to official figures published today by industry body OGUK.

Official figures on both on and offshore employment will not be available until next year, but tentative signs are “worrying”, says the Work Insight report, and emphasise the need for governments, industry and regulators to collaborate to protect jobs and skills.

The report follows a survey of nearly 1,400 production workers, nearly half of whom said they had been furloughed or made redundant since March and 81% would consider leaving the industry.

The author of the report, OGUK workforce engagement and skills manager Alix Thom, said: “Our figures confirm the initial operational impact of the lockdown back in March this year … numbers have risen steadily since then as industry has adopted a robust ‘Swiss cheese’ barrier model, with a range of preventative measures in place both prior to mobilisation and whilst offshore, which has helped secure more jobs and increase operations in the immediate term.

Ms Thom added: “Despite this, we continue to see some very worrying signs for employment in the sector, with the uptake of furlough and continued suppression of global energy demand impacting our industry like many others in the wider economy.

“As our report shows, the recruitment and retention of diverse and talented people will be essential as we work to support UK energy needs both now, and in a lower carbon context.

“A North Sea Transition Deal, supported by the UK and Scottish governments, can act as a catalyst for this future, and in so doing will provide certainty on the sustainability for the sector in difficult times.”

FRP Advisory says the current downturn in the North Sea is likely to see a far deeper level of oil and gas restructurings and a higher level of insolvencies than in 2015, the last comparable period when there was a much stronger base position.

Specialist Chad Griffin, who was heavily involved in oil and gas and service sector restructurings in the last cycle, is suggesting that primary casualties of this cycle are likely to be oil service companies and second or third tier businesses lacking the capital and scale to withstand the growing financial pressures set to impact the sector during 2021.

“The key drivers of this cycle will be cash, costs, pricing and consolidation” he said. 

Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.