The contraction of Britain’s offshore oil sector has already stripped out 65,000 jobs, according to a new report.
[contextly_sidebar id=”E2K9ddiKy4K0D29r6G2GNanxpWXfiLPS”]The calculation of a 15% drop since the start of last year came from the annual economic impact report of trade body Oil and Gas UK.
It said the number of jobs supported by direct, supply chain and indirect employment had fallen from 440,000 to 375,000.
The cuts came as operating expenditure on existing assets was slashed.
About £800m (8%) of costs have been cut this year and a further £1.3bn (14%) is planned for next year.
Some large fields are coming on-stream, so those cuts will be offset by more than £1bn per year being spent on operating them.
The report said cost-cutting could be expected to be the focus of industry activity for the first nine months of this reaction to lower prices.
After that, it should move on to improving efficiency and then transforming the industry over three years. Those processes could lead to further job losses.
The Oil and Gas UK calculation of job losses is based on a 15% reduction in the direct employees of the offshore industry, down by 5,500 from the official estimate in 2013 of 36,600.
The wider impact follows from applying that scale of cut to the supply chain and those who depend, in turn, on those companies’ and workers’ spending.
The industry is responding to revenues falling by 20% last year, and another 30% this year.