Oil & gas job woes set to continue

Data taken from the latest Bank of Scotland oil and gas report reveals half of the 141 companies surveyed had to make job cuts in 2015.

Worst cases included 83% of drilling companies recording job losses, and 70% of maintenance firms making cuts, the survey says.

No one has a crystal ball, but when asked about oil prices, the majority of our respondents anticipate 'lower for longer'

Stuart White, Bank of Scotland area director, North of Scotland

Job cuts in the oil and gas industry have been a recurring theme for some time with the likes of Schlumberger axing 10,000 jobs in quarter four last year, and BP cutting 4,000 jobs globally, including 600 in the North Sea.

It is a trend that will continue throughout 2016, despite a ratio of one job gained for every six lost, the report finds.

Roughly two-fifths of all future job cuts will be made in Scotland, though according to the report: “the numbers involved are relatively small at about 20 jobs per company on average”.

The sector’s employment issues are also creating a longer-term concern, the report says.

Forty one percent of those surveyed suggest young people will not see the sector as a viable career option, which would create a skills gap that would be further exacerbated by the cyclical nature of the industry.

However, 53% think young people would either “see the downturn as part of the natural lifecycle of any industry and would still recognise its long-term prospects, or that any concerns caused by the downturn would dissipate once the industry was on an upwards trajectory”, the report says.

Elsewhere in the survey, and despite job cuts and low oil prices, 55% of those surveyed say there are opportunities.

Roughly half (51%) say diversification is the best route to uncovering new opportunities, while 49% say new contracts is most important.

New technology (40%) and internationalisation (38%) are also of interest to a significant number of companies, the report finds.

“Though there are undoubtedly more difficult decisions to be taken on cost savings, jobs and investment, cautious optimism for the future outlook appears to be slowly returning,” said Stuart White, Bank of Scotland area director, North of Scotland.

However, White added that: “No one has a crystal ball, but when asked about oil prices, the majority of our respondents anticipate 'lower for longer' pricing and don’t expect Brent crude to recover to a sustained level of $75-80/barrel until 2020 or later.”