Earlier this year, Oilprice.com reported on the gloomy outlook for North Sea oil and gas, concluding that over 100 oil fields could be shuttered over the next five years. And even though 2015 saw a small uptick in North Sea oil output, most of the mature fields in this area have become uneconomical at today’s oil prices.
The shutdown of oilfields has led to a massive wave of layoffs in the last years. A trend that is unlikely to reverse in the short-term.
Around 120,000 British oil industry employees will have lost their jobs by the end of the year since 2014, according to an EP Magazine report citing a local industry lobby group.
In 2014, oil industry-related jobs, including supply chain management and oil field services, stood at 450,000, but by the end of this year, the number will fall to 330,000, a report by Oil and Gas UK said.
Royal Dutch Shell, a major employer in the United Kingdom, as well as United States-based Chevron have both announced layoffs internationally as the oil-price crisis takes its toll on bottom lines.
A total of 465 more people in the U.K. will lose employment with Shell, according to a release by the company last week. The move represents a small part of the company’s global effort to cut 12,500 jobs by the end of the year. Related: Only Five Oil Majors Make The Fortune 500 List
"The total employment we will sustainably provide depends on the level of investment attracted into the basin," Deirdre Michie, who heads Oil and Gas UK, said. "If investment falls, then so will jobs.”
The market downturn has strongly impacted production in the North Sea—the British basin that has been offering its oil and gas bounty to international and domestic markets since 1851. The high exploration and production costs associated with operating in the basin have led to 8,000 firings since the crisis started in 2014.
Roughly half of British oil employees work in Scotland, where the local government has developed a task force to aid newly unemployed workers in their quest to find a new way of make a living.
Brent oil, considered to be the international standard, hovered at around $50 a barrel on Friday – less than half the pre-bust 2014 price that supported 450,000 jobs in Britain.
“We cannot underestimate the impact the global downturn in the industry is having on the UK economy, nor the personal toll for those who have lost their jobs, and the effect on their families and colleagues,” Michie said.
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By Zainab Calcuttawala for Oilprice.com
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