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The UK oil and gas industry lost 60,000 jobs last year, according to Oil & Gas UK’s latest Economic Report. That was 20,000 jobs more than the authority had initially predicted but, it said, the pace of job loss is slowing down.
So far this year, Oil & Gas UK said, the rate of job loss has been 4.2 percent, down from 15.6 percent in 2016 and 19.4 percent in 2015. The authority projects that 2017 could see the loss of another 13,000 jobs, with the total of people employed in the industry either directly or indirectly, falling to 302,200. To compare, 2014 marked a peak of employment in oil and gas, at almost 464,000.
The authority noted that while in the last two years job cuts were a direct result of cost-cutting efforts amid the oil price crash, now cuts were being made as a result of M&A deals and as part of structural changes aimed at ensuring companies’ sustainability over the long term.
The UK continental shelf remains an attractive spot for oil and gas investors, despite high production costs, aging fields, and decommissioning costs for production equipment at these aging fields.
Bloomberg reported on Monday that a total of 14 startups with a combined production of 230,000 bpd are expected to come on stream in the UK section of the North Sea this year, the highest yearly new oil output in ten years citing data by energy consultancy Wood Mackenzie.
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The projects are the result of the high investments in this mature basin that were made before the 2014 oil price crash. The outlook beyond 2018 is not nearly as bright due to the underinvestment in new projects following the slump in oil prices, according to Wood Mac.
Next year, the UK North Sea’s average oil and gas production is forecast at some 1.9 million barrels equivalent of oil and gas, with the output from this year’s projects representing 12 percent of the total production, the consultancy said.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.