Up to 30,000 jobs in the country’s oil and gas sector are at risk, according to a report from Oil & Gas UK (OGUK), an industry representative body of UK’s offshore oil and gas.
The global oil industry has been severely hit by a crash in demand as a result of the Covid-19 coronavirus pandemic.
The price of Brent crude, which is the international benchmark, fell last week to its lowest level since 1999, after US oil prices turned negative for the first time ever.
The supply drop turned into an oil price crisis when a price war between Saudi Arabia and Russia erupted. However, record global supply cuts were agreed this month, and these will take effect from next month.
Most oil and gas operators in the North Sea are now planning deeper spending cuts, while many companies have already announced lay-offs.
OGUK has outlined a three-stage plan which it hopes will minimise the longer-term impact. It has urged governments and regulators to support it in addressing the industry’s immediate needs, followed by the industrial recovery, and then an accelerated transition to a net-zero greenhouse gas (GHG) emissions future.
According to the Financial Times, OGUK expects the 30,000 job losses to come both from oil and gas producers, as well as in the supply chain.
Commenting on the report, OGUK chief executive Deirdre Michie said: “With historic low oil and gas prices coming so soon after one of the most severe downturns our sector has experienced, these findings confirm an especially bleak outlook for the UK’s oil and gas industry.
“If the UK is to maintain its supply of domestic energy, protect jobs and build the critical infrastructure it needs to transition to a net zero future, ours is an industry worth fighting for.
“It’s why OGUK is today outlining a three-stage framework with a range of measures for governments and regulators to support industry now, stimulate a recovery and accelerate the transition to a net zero future.”