North Sea oil and gas could lose up to 35,000 jobs in the next five years, industry experts have warned.
A recent report by EY, the financial consultants, was commissioned by Oil & Gas UK, Opito, the safety body, and the Department for Business, Innovation and Skills has said that employment in the North Sea oil and gas sector is set to fall from 375,000 to 340,000 within the next five years as exploration and production continues to decline.
Although some of the job losses will come with the retirement of older workers, the report reveals that more than half of the workforce is under the age of 45. However it does predict 12,000 new staff will be needed to clean up the North Sea and dismantle rigs, while offshore fracking could create jobs.
Despite record investment in the North Sea last year only 15 wells were drilled as production costs soared more than 15 per cent. The sharp rise in costs has led oil and gas companies to focus their investments in Norway and North America rather than the North Sea.
Jake Molloy, regional organiser of the RMT union in Aberdeen, said to the Dailyrecord.co.uk:
“This report confirms that we are in for a very rough time over next few years and the industry needs the government to act. For every offshore job that is lost, three more industry jobs are lost onshore.”
“The offshore industry is facing what amounts to a perfect storm of a falling oil prices on global markets, the shale revolution, rising costs to extract oil and gas from the North Sea, and smaller and harder-to-access fields.”
The UK government needed to give companies a tax regime that made investment more attractive, he said.