The slump has already cost more than 5500 jobs and industry watchdogs and unions have warned that more could follow.

Energy experts have warned that thousands of workers are facing the axe after a North Sea oil slump has already cost more than 5500 jobs.

Industry watchdog Oil and Gas UK said that the estimate of 5,500 recent job losses may be low while trade union Unite warned that cuts triggered by low oil prices could put the safety of remaining employees at risk.

Some 1,700 people have attended events organised by a Scottish Government taskforce to help workers find jobs.

Deirdre Michie, chief executive of Oil & Gas UK, told The Herald: “We are applying the lessons we have learnt from the past and we know that our focus cannot merely be on ‘cutting costs’.

“In a more profound and universal way we must address the efficiency of the basin so that, if or when the oil price bounces back, we will be best placed to seize new opportunities.”

BP, Royal Dutch Shell and Total are among those reducing staff, while investment and projects have been put on hold. Last year, North Sea exploration reached its lowest level in at least two decades, with only 14 explorations wells drilled, compared to 44 in 2008.

Alex Kemp, professor of petroleum economics and director of Aberdeen Centre for Research in Energy Economics and Finance at Aberdeen University, said: “There has had to be major reassessments and cost reducing initiatives, and that’s going to continue this year and beyond. Some cutbacks are linked to completion of contracts, meaning that rather than breaking contracts they are not renewed. That will continue.

“We’ve done modelling which shows that a $70 dollar price, there will be much less investment than at $90. Tax concessions in the budget may be worthwhile in the medium term, but a lot of new projects are not viable with zero tax. Something like $70 could be the position for several years ahead.”

Pat Rafferty, the Unite Scottish Secretary, said: “Oil firms have received £1.3 billion in tax breaks, but are still cutting jobs which could ultimately impact on health and safety.

“Over the longer term, we have major concerns about a brain drain and there being a lack of skills and expertise in the industry for when oil prices begin to recover.”

A Scottish Government spokesman said the sector employed 200,000 people and that Scotland remained a “global leader” in the oil and gas industry.

Source: www.dailyrecord.co.uk

Please leave comments and feedback below