The Press and Journal (Inverness, Highlands, and Islands)
COVID & OIL PRICE CRASH SAW 35,000 JOBS LOST IN 2020
Nearly 35,000 UK jobs supported by the oil and gas industry have been lost in the last year as Covid and volatile prices struck, according to a new report.
In its latest Workforce and Insight review, trade body Oil and Gas UK (OGUK) has set out the “incredibly challenging” impacts of Covid-19 and the global crash in commodity prices in 2020.
The sector has seen the number of direct and indirect jobs which it supports across the country drop from 152,100 in 2019 to 117,400 in 2020, surpassing a warning made last year that around 30,000 jobs could be lost.
OGUK said the majority of these are “indirect” roles supported by the sector across 35 industries such as manufacturing, catering and clothing companies for PPE.
Market intelligence manager Ross Dornan said the figures demonstrate the far-reaching impact of reduced oil and gas spending on the national economy.
He added: “Obviously we’re an industry which has a range of energy hubs and Aberdeen is one, if not the largest, of them.
“Aberdeen has been at the centre of this and we can all feel that living here.”
Jake Molloy, regional organiser of the RMT union, said the figures should act as a “catalyst” for action on the energy transition and “getting projects moving to enable those displaced to move into the renewables sector”.
He added: “The whole north-east region has been impacted and the fact you’ve got so many indirect jobs demonstrates that.
“It ripples right out to other services, be it hospitality, hotels or even taxi drivers. Everybody is feeling it.”
Although not entirely owing to oil and gas, the report highlights the number of unemployment related benefit claims made by residents of Aberdeen and Aberdeenshire doubled between February 2020 and 2021, up almost 8,500.
Last year the price of Brent crude oil tumbled 35% as demand reached its lowest levels since 1995, which OGUK cites as the main reason for the losses, with estimates of around £3 billion of North Sea spending deferrals which could take up to three years to be recovered.
Covid-19 saw drastic reductions in the number of workers travelling offshore, with 10,400 fewer than 2019 as crews were reduced to core personnel only.
Meanwhile the number of EU nationals working offshore in the UK dropped by 27% and non-EU workers were reduced by 54%, while the UK workforce fell 17% by comparison.
OGUK said this could be explained in part by quarantine rules and travel restrictions arising from the pandemic.
The number of workers on furlough who are part of the industry remains unclear due to supply chain crossover with other areas like manufacturing and construction.
However government figures show 1,100 workers in the “mining, quarrying and utilities” sector remained on the scheme as of the end of May compared to 15,700 in May 2020.
OGUK said that, while it is important “not to shy away” from the reality of the situation, there are tentative signs of improvement.
The number of workers offshore has now risen to pre-pandemic levels thanks to the vaccine programme and easing of restrictions.
Meanwhile the number of direct and indirect jobs supported by the industry is expected to have risen in 2021 to 118,400, albeit 33,700 fewer than pre-pandemic.