The value of the oil and gas sector to Scotland’s economy has dropped by £3.44 billion compared to last year, according to data from the leading trade body.
Offshore Energies UK (OEUK) has found the industry contributes £16 billion in gross value added (GVA) to the Scottish economy, down from a similar report in August setting out £19.44bn in GVA (12% of total Scottish Gross Domestic Product).
The group said the drop is down to “lower than anticipated investment and production levels” in 2021.
It comes as Nicola Sturgeon has this week announced an October 2023 date for a second Scottish independence referendum, with energy – and oil and gas – sure to be a major issue as it was in 2014.
The report has also shown major changes developing on the industry’s employment side, though the trade body said there is not a direct relationship between GVA and employment.
The new OEUK report states that there are “more than 82,000 jobs across the country” in the oil and gas sector. However, in August it was reported that there were 64,000 jobs in the north east and 71,500 across the whole of Scotland.
This means that employment in the oil and gas industry has increased by more than 10,500 and yet the sector’s GVA is down by £3.44bn.
The most recent report also mentioned that within the UK as a whole, the oil and gas industry contributes £26.5bn GVA, supporting more than 200,000 jobs across the country. The August report found that “across the UK as a whole, the oil and gas industry contributes £31 billion GVA, supporting almost 200,000 jobs across the country.”
This shows a downturn in the GVA of the UK oil and gas sector of £4.5bn. Showing that it is not only Scotland’s oil and gas sector that is suffering.
When asked for comment market intelligence manager at OEUK Ross Dornan said: “There is not a direct relationship between GVA contribution and employment – different trends affect each.
“From the research, we can see a slight increase in the number of jobs supported by oil and gas in Scotland, which is driven by the reopening of the economy after COVID restrictions lifted and some revisions to official data. On the other hand, the contribution of oil and gas to the Scottish economy has dropped after lower than anticipated investment and production levels were recorded in 2021, following on from the impact of the pandemic and market challenges in recent years.”
© Supplied by OGUKDespite the disparity between August and the most recent report External Relations Director at OEUK Jenny Stanning said: “This research showcases the significant role of the oil and gas industry in the Scottish economy. Companies in Scotland help maintain the country’s supplies of home-produced oil and gas while also building the low carbon energy systems of the future.
“By supporting the production of energy in the UK, we can attract the investment needed to avoid becoming increasingly reliant on imported energy, support jobs, and continue to make a significant contribution to the economy while meeting our climate goals, which is why we remain concerned about the impact of sudden new taxes on the sector at a time when we need to prioritise energy produced in the UK.”
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