Oil and gas jobs hit hard by pandemic – calls for government to support a sustainable recovery

Oil and gas jobs hit hard by pandemic – calls for government to support a sustainable recovery

 

UK’s oil and gas workers kept energy supplies flowing throughout pandemic and are increasingly taking up the green challenge.

The UK’s changing oil and gas industry has been hit hard by the Covid-19 pandemic and will require ongoing support from across the political and regulatory spectrum to lock in any recovery, according to a new report from OGUK, the leading representative body for the UK offshore oil and gas industry.

Due to lower levels of activity, 34,000 fewer direct and indirect roles were supported by the industry last year, partly due to Covid-19 restrictions but mainly because the pandemic caused a global slump in demand and prices for oil and gas, said OGUK’s annual Workforce & Employment Insight report. It found that the biggest decline was in indirect jobs which are estimated to have fallen from around 121,700 in 2019 to around 91,700 in 2020. Direct jobs fell from around 30,400 to around 25,700.

There are, however, some small indications of increasing activity as a result of improving commodity prices and low carbon and renewables developments. Having dropped to around 7,000 Personnel on Board (POB) in April 2020, the offshore oil and gas workforce has now increased, while mid-June saw more than 11,200 POB offshore. Indirect and direct jobs supporting the sector are also forecast to increase slightly in 2021. There is also anecdotal evidence that workers who trained in the oil and gas sector are increasingly supporting renewable and other low carbon projects.

The impact of Covid-19 on the UK’s offshore oil and gas workforce comes on top of the longer-term shrinkage caused by natural declines in output from the North Sea, which has been producing for five decades.

The UK still relies on oil and gas for 73% of its total energy needs and the UK sector played a crucial role in maintaining these supplies through the pandemic.  Despite this, some groups continue to call for a rapid cliff-edge reduction in UK offshore oil and gas production – before alternatives are in place at the required scale. This would increase reliance on imported oil and gas and only serve to export our emissions, worsen the balance of payments and undermine the UK industry’s efforts to build the workforce and low carbon technologies of the future.

Earlier this year OGUK’s members signed up to the North Sea Transition Deal, a partnership with the UK Government, aimed at harnessing the industry’s engineering ingenuity to help the UK achieve net zero emissions by 2050. This includes helping to support the workforce the nation will need to deliver low carbon energy.

Launching the report today, OGUK chief executive Deirdre Michie said the findings underlined the need for continued support for a managed transition to a low-carbon future, prioritising UK energy security, jobs and homegrown solutions.

The report shows:

Industry activity supported 117,400 direct and indirect jobs in 2020
This is anticipated to rise slightly to 118,400 in 2021
The jobs lost in 2020 affected 35 sectors besides those involved in producing oil and gas, from PPE (Personal Protective Equipment) manufacturers to construction and computing firms
The UK’s offshore oil and gas sector supported jobs in all UK regions
10,400 fewer people travelled offshore in 2020 compared with 2019
Travel restrictions led to a significant drop in the number of international offshore workers
The average age of the core offshore workforce remained at 44.1
Women made up 3.4% of the offshore workforce, down slightly on 2019
90% of oil and gas jobs have high or medium transferability to other energy sectors
OGUK commissioned the industry’s first-ever Diversity & Inclusion Survey showing an encouraging score of 7.1 out of 10. This will also act as a baseline for future surveys

Commenting on the Workforce & Employment Insight report, OGUK Chief Executive Deirdre Michie OBE said:

“These findings reflect an incredibly challenging time for our industry, and its people. We’ve not yet fully recovered from the events of the last 18 months, but the relaxing of movement restrictions plus the industry’s focus on the wellbeing of workers mean jobs are starting to return. This is a welcome recovery, but it is very fragile and we cannot take it for granted.

“At the same time, we face the even greater challenge of adapting to climate change. Our industry already has the expertise to deliver new technologies, such as carbon capture and storage or mass hydrogen production, which will be essential in cutting the UK’s emissions.

“However, it can only do this if the Government reinforces it’s support for industry by working to deliver the commitments within the North Sea Transition Deal and by continuing to ensure fiscal and regulatory stability. Our investors need this reassurance if they are to support the delivery of a progressive transition that prioritises energy, jobs and homegrown solutions here in the UK.

“As an industry, we’re proud to be on such an exciting journey, but we continue to warn against the cliff-edge transition being promoted by some as this would damage not just our industry but the whole nation. Our industry is committed to playing a crucial role in helping the UK meet its climate ambitions of being net zero by 2050.”

The report can be downloaded via WeTransfer.

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Published: 12-08-2021