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Image courtesy of papagaio-pirata/Flickr.

The number of jobs supported by the UK offshore sector has declined by over 100,000 in the last two years, according to a new report.

Oil & Gas UK, an energy industry trade group, said Thursday that jobs supported by the UK’s offshore sector will have fallen by an estimated 120,000 by the end of 2016 since peaking in 2014.

The analysis was conducted by marketing services company Experian and forecasts that just over 330,000 UK jobs will be delivered through or supported by oil and gas production this year.

The jobs included in the analysis were direct employment provided by upstream and services companies, indirect employment across the supply chain and jobs created by oil and gas sector spending across the economy.

Jobs linked to the UK oil and gas offshore sector peaked at over 450,000 jobs in 2014.

However, after oil prices plummeted in late 2014, jobs supported by the sector dropped by an estimated 84,000 to around 370,000 in 2015.

Current forecasts project that jobs supported by the sector will decline by another 40,000 by the end of this year.

Oil & Gas UK chief executive Deirdre Michie said that overspending in the years leading up to the 2014 oil price crash is partially to blame for the job reductions.

“The industry has been spending more than it is earning since the oil price slump towards the end of 2014. This is not sustainable and companies have been faced with some very difficult decisions. To survive, the industry has had no choice but to improve its performance,” Michie said.

Michie said that cost-cutting measures have improved competitiveness but more work must still be done to make sustainable changes.

“Competitiveness is improving as a result of the work the sector is doing in this area – and is being reflected in the reduction in unit operating costs from almost $30 a barrel in 2015 to around $17 this year. But to protect our industry and the skilled jobs it provides we need to see further efficiencies,” Michie added.