It has been claimed that up to 30,000 jobs in the UK oil and gas sector could be lost over the next 18 months without helping to alleviate the pressures of the price collapse caused by the coronavirus crisis.
Industry organization Oil and Gas UK (OGUK) has called for additional government and regulatory support as operations in the North Sea are disrupted by the pandemic and demand for oil and gas collapses in because of the effect of blockages on the world economy.
He said that more than half of the world’s population had been affected by the COVID-19[female[feminine crisis – the costs of American oil for delivery in May even became negative for the first time at the beginning of the month, the storage capacity being exhausted.
OGUK has reported serious damage in the UK due to the steady decline in Brent crude prices over the year to date – reaching a 20-year low of 16 dollars a barrel just over a week and falling as low as 13 dollars.
The gas, the body said, was selling at prices seen 14 years ago.
Its business outlook report, derived from responses to a survey of OGUK members, was released just a day after unions representing oil workers asked for taxpayer contributions in offshore projects to support operators and jobs.
OGUK warned that the current environment would drop investment by up to £ 4 billion – more than a quarter – to levels not seen since 2000 and approaching figures seen in the 1970s.
At the same time, drilling is expected to drop 50% – pushing activity to record levels – as it was not financially viable to extract the product at such low prices.
He warned that due to market weakness, supply chain revenues and margins could drop by almost a third over the 18-month forecast period.
OGUK said that 30% of survey respondents have so far been successful in gaining access to government support funds and that meant there was some uncertainty about the immediate risks to employment.
But he warned that, caught in the aftermath of the 2015-16 price drop, 30,000 jobs could be lost unless the offshore sector is supported.
He presented a proposed three-step framework to cover: immediate needs, industry recovery and “acceleration” to a zero net future.
Deirdre Michie, CEO of OGUK, said: “Like so many other sectors, our members have been deeply affected by COVID-19.
“With historically low oil and gas prices coming so soon after one of the most severe downturns in our industry, these results confirm the particularly bleak outlook for the UK oil and gas industry. “
She continued: “If the UK wants to maintain its domestic energy supply, protect jobs and build the essential infrastructure it needs to move to a net zero future, ours is an industry worth fighting for. .
“This is why OGUK today presents a three-step framework with a range of measures for governments and regulators to support the industry now, stimulate a recovery and accelerate the transition to a net zero future. “