Wow …12,000 new entrants to join offshore oil and gas industry in next five years headlines the industry report. Brill!
But, over the same period, around 9% of the current workforce, for long said to be around 450,000 but now discovered to be 375,000 will disappear.
I’m curious about the apparently sudden drop from 450,000 to 375,000 direct and induced. It doesn’t seem to be explained.
That’s a heck of a reduction and begs the question as to the accuracy of the old overall workforce number. I have to assume that the methodology that generated the 450,000 figure a decade or so ago was as rigorous as the one that EY has applied for this latest study.
Am I surprised at this apparent drop? Not really, not when one considers that North Sea operators have been spending more and more money on producing less and less oil since the peak of 1999.
Quite how this translates into people I don’t know. But perhaps whilst costs have been rocketing, quite a few workers have been quietly let go … dribbled out into and quickly absorbed by the global marketplace.
It’s only a guess, of course and I’m probably wrong.
Anyway, the new headline number is 375,000 and, as already said, I’ve so far failed to spot an explanation about the drop.
But now to the forecast job losses over the coming five years, with the workforce expected to shrink to around 340,000 jobs, with Aberdeen and the northeast of Scotland destined to take the biggest hit as this is where the greatest concentration of jobs is located.
However, we are told that there could be as many as 12,000 new entrants to the industry over the same period, which seems to suggest that north of 40,000 existing jobs will be going out the door, either through retirement, proactively moving on to another industry or going elsewhere on the planet but staying in oil, or because they were fired … er, made redundant.
Hundreds of jobs are being axed right now, like the 230 that ConocoPhillips is about to shed following a “townhall” here in Aberdeen (Dec 8).
Everyone else in that company’s North Sea business will have to reapply for their old jobs, doubtless for less money. I wonder how this sort of activity will show up in future statistics, especially as many thousands more North Sea workers will be forced to do the same.
But at least I’m encouraged to see that the ageing workforce issue has been buried, with a very healthy average reported by EY.
I’m encouraged too that a far greater percentage of firms in the UK upstream oil & gas industry … over 80%, have active apprentice and graduate programmes. That’s good.
And I’m encouraged to note that nearly 30% of the workforce are engaged in overseas activities. But I want to see that grow in real terms. North Sea shrinkage must be more than countered by global growth.
But, and it’s a big but; how accurate will this forecast turn out to be? It will have been in gestation for some months I’m thinking … er, when the oil price was higher than now.
Meanwhile, the oil price is plummeting and no-one has even the faintest idea when or where it will bottom out, let alone recover. Hundreds of jobs have been shed over the last very few weeks in Aberdeen alone. Thousands more will be axed.
What then for graduate and apprentice programmes in oil & gas?
Eventually the battle to attract talent will start all over again. And it will be tougher than ever, mark my words.
Jeremy Cresswell is energy editor at Energy Voice’s sister publication, the Press and Journal
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