UK offshore jobs drop 14% in 2017. Slight increase expected in 2018

Employment in the UK offshore oil and gas sector fell 14% in 2017, to around 280.000, Oil & Gas UK said in its workforce report on Thursday. The report, however, notes a slight increase in offshore jobs for 2018.

The industry body found that the biggest reduction in offshore workforce came from offshore drillers, as drilling activity fell to a record low. The numbers for 2017 have been explained by the drop in oil prices.

Oil and Gas UK pointed to the fact that the oil price fell from circa $109 per barrel (bbl) in mid-2014 to an average of $54/bbl in 2017, leading to a significant contraction across the sector.

“In the aftermath of the price fall, oil and gas companies have had to streamline and rationalize to sustain their businesses and focus on improving efficiency in response to the prevailing business environment. This has inevitably had a negative impact on employment both from the reduction in activity and efforts to reduce costs,” the report reads.

Per OGUK data the employment rate in the UK offshore oil and gas industry peaked in 2014, with over 450,000 jobs.

“However, there was a sharp drop in 2015, when employment contracted to around 380,000. The latest estimates for 2016 and 2017 show employment levels supported by the industry falling to levels not previously seen since 2010/11, with 280,000 jobs estimated to be supported by oil and gas activity in 2017…” Oil and Gas UK said.

Increase in employment for 2018

The industry body now, for the first time in four years, estimates a slight upturn in employment in 2018, as the industry continues to improve its competitive position.

“Total employment is expected to rise by nearly 3,000 jobs across the course of the year to 283,000, up from 280,000 in the previous year.”

“This comes after total employment supported by industry fell by 14 percent in 2017 – below previous estimates of 302,000 as the downturn continued to be felt by the supply chain. Increased levels of investment were seen in the sector but were slow to filter through,” OGUK said.

The industry body today said that the wider workforce trends are indicating an industry working to deliver Vision 2035, with efficiency improvements and technological transformation being introduced, suggesting new ways of working for the UK’s oil and gas sector. It comes as the report shows the average offshore age of the workforce fell last year, with a 20 percent increase in offshore workers under the age of 30.

However, Oil & Gas UK today warned investment continues to be needed to stimulate activity and generate sustainable growth.

The report shows:

• The average age of offshore workers in 2017 was 42.2, compared with 42.7 in 2016

• The number of offshore workers under the age of 30 has increased by over 20 percent since 2016

• Women represented three percent of the offshore workforce, and 23 percent for the industry overall

• Almost 50,000 people traveled offshore in 2017, 6 percent down on the previous year

• 14 percent of those who traveled offshore in 2017 were from outside the UK, half of those coming from other EU countries

• The west of Shetland area has seen the largest growth in employment with workers in the area more than doubling since 2014 thanks to several major developments.

• The continued pressure on drilling is reflected in the offshore population figures, which have seen a 35 percent decline in drilling roles since 2014.

Worst behind us; Employment stabilizing

Commenting, report author and Oil & Gas UK Workforce Engagement and Skills Manager Dr. Alix Thom said:  “Our report shows a stabilization in the total employment supported by industry, returning to levels in line with the long-term trend before the peak in activity in 2014.

“This has not been without a personal cost to many, and the revised figures for 2017 show the scale of the downturn is even more severe than previously understood.

“The slight upturn forecast for 2018 suggests that the greatest period of rationalization is behind us. Industry must maintain its focus on efficiency whilst securing badly needed investment in the basin to stimulate fresh activity. This sustainable approach is key to maintaining the workforce profile needed to deliver our long ambitions for the basin.

Women make 3% of the offshore workforce

Thom added: “It is encouraging that the number of offshore workers under the age of 30 continues to grow. However, with women representing 23 percent of the total workforce and three percent of those traveling offshore, the industry must retain its focus on improving diversity and inclusion across the sector.

“As our report notes, advancements in technology will inevitably spell new ways of working, for example, increased stabilization could see a rise in offshore work being done remotely. It will be vital for the industry to understand the existing and future skill profiles in the workforce and proactively develop the talent required.

“It sets the platform for recruiting and retaining the people needed to deliver Vision 2035–a new intake of highly skilled, adaptable and creative talent, with the diversity needed to maximize economic recovery and identify supply chain opportunities at home and abroad.”