The down turn in the global oil and gas industry ever since the oil prices started sliding in 2014 has seen nearly 8,000 jobs getting lost from the North Sea oil and gas industry in the UK while 120,000 roles have gone across the wider economy in the country, says the industry body.

Employment in the oil and gas industry has fallen from an estimated 41,700 in 2014 to 34,000 today according to the figures that were released on Friday by the Oil and Gas UK.

On the other hand, there has been a fall from 453,800 to 330,400 during the same period in the number of jobs that rely on the industry that include taxi drivers, hotel staff and caterers.

By the end of the year, there would be a further fall of 40,000 jobs in the number of supported jobs, expects the organization.

“We cannot overestimate 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,” Deirdre Michie, chief executive of Oil & Gas UK, said.

With the price of a barrel of crude oil dropping from about $115 to just $50 during the period of slide that started in 2014 and still continues, the oil and gas industry has been severely hit and the statistics present on Friday underline the damage caused to the economy of north-east Scotland since that period.

Despite being one of the oldest oil basins in the world, and also because it is one of the most expensive for producers, the UK North Sea has been particularly badly hit by the slump.

In the recent months there have been steep cuts in jobs by some of the biggest oil producers in the world. While BP said in January it was shedding 600 jobs in various roles, Shell announced last month that it was cutting another 475 jobs in the UK North Sea region

The rest of economy has witnessed a significant knock-on effect due the job cuts in the oil and gas sector.

The proportion of people claiming unemployment benefits has now overtaken the UK average at 2.1 per cent such number of claims in Aberdeen has more than doubled since the end of 2014. As a consequence, in the past there has been a drop in house prices in the city by a whopping 14 per cent.

With the aim of avoiding heavy up front costs, many cash-strapped companies are delaying shutting down their exploration operations in the region even though some people in the area are hoping that the job of taking apart oil platforms will provide an economic boost to the region.

(Adapted from CNBC)

Categories: Economy & Finance