Aberdeen will feel the effects of the oil sector downturn for years to come, with another 5,500 energy sector jobs expected to be lost by 2027, a new report says.
But the job losses will be partly offset by strong growth in the digital, creative and financial service sectors, according to the study.
A trade union official said the development was “very disappointing”, while industry body Oil and Gas UK (OGUK) said attracting fresh investment was vital.
The oil job losses figure was highlighted in a city council report into a draft regional skills strategy published by Skills Development Scotland (SDS). The strategy looks to address the oil downturn’s impact on the region’s skills base.
In September, OGUK said the oil sector supported 300,000 jobs in the UK, down from 460,000 in 2014.
Also that month, First Minister Nicola Sturgeon was accused of believing the oil and gas downturn was “already over” after the Scottish Government wound up the Energy Jobs Taskforce, which had been created to protect North Sea jobs.
The draft strategy warned that the current slump had been longer and deeper than previous downturns, and that it was “uncertain” whether the sector would “return to playing such a dominant role” in the regional economy.
The strategy authors also said it was clear that the oil downturn had impacted other sectors, including retail, hospitality, transport and property. They said the north-east must build a more balanced economic future if it is to prosper.
On a more positive note, they predict there will continue to be “opportunities” in the sector for years to come and prioritise ways of tackling skills challenges.
The first action involves “responding to the current downturn” and highlights several initiatives created to help oil workers, including the Transition Training Fund (TTF).
SDS has approved 2,825 applications for funding from oil workers who wish to retrain through the TTF, launched by the Scottish Government in 2016.
The strategy recommends the creation of an “enhanced employability service” which would use training and mentoring to get workers back into employment quickly.
SDS is also prepared to coordinate with its partners on the development of a digital platform for engaging with “affected individuals”.
Tommy Campbell, regional officer for the Unite trade union, said: “The news that there are going to be fewer jobs in the coming years is certainly very disappointing. There are plenty of job opportunities that could be created if there was investment. We need to invest, particularly in young people.”
OGUK market intelligence manager Adam Davey said: “Predicting employment levels in the oil and gas industry will depend on future levels of investment and the type of activity that will be taking place on the UK continental shelf, which is why the key priority is to attract fresh investment into the basin to drive new activity and protect jobs.”
Colin Clark, Scottish Conservative MP for Gordon, said: “The headline figure that a further 5,500 jobs could be lost over the next 10 years is alarming, but the assessment also states those losses will be offset by strong growth in other areas of the north-east economy.
“The long term predictions are still for employment in the Aberdeen area to grow by tens of thousands up to 2027, but we cannot afford to be complacent.
“The UK Government has taken welcome steps in the Budget to support the oil and gas sector, but we must also work to diversify the economy, address skills shortages and improve local infrastructure.
“The Scottish Government also has a major role to play in that regard. The first thing that should happen is a rethink of the SNP’s high tax agenda which will do nothing to aid economic growth.”
Scottish Energy Minister Paul Wheelhouse said: “A forecast can only present one potential outcome based on chosen assumptions and they always need to be appropriately caveated.
“November’s Aberdeen Chamber of Commerce survey on oil and gas reported an 11 percentage points rise in the number of contractors who feel an increase in business confidence for the coming year and that is very encouraging.
“However, while we are using our devolved economic development powers to support the sector, key policy levers remain reserved to UK Ministers and so we will continue to lobby for the support the sector deserves.”
SDS’s regional skills planning lead, Allison Carrington, said: “The regional skills strategy for Aberdeen and Shire has been facilitated by SDS on behalf of both councils, Scottish Enterprise, NESCOL, Aberdeen and Grampian Chamber of Commerce, Aberdeen and Robert Gordon Universities, NHS Grampian and Visit Aberdeenshire.
“It sets out a collective response to the regional economic strategy, the ambitions of the Aberdeen City Region Deal, in the context of the challenges and opportunities facing the north-east.
“It aims to respond to the downturn in the oil and gas industry; support economic transition; work with partners in the skills system and supporting school to work transitions.”
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