Up to 30,000 jobs could be lost over the next 18 months as the offshore sector faces a “bleak” future, an industry body has said.
Oil and Gas UK (OGUK) has published a report which sets out the economic impact of the coronavirus crisis, saying help is needed from governments and regulators to bring about a recovery.
The price of Brent crude, the main benchmark used by UK oil producers, has dropped to a 20-year low, while gas prices are at a 14-year low.
Companies in the industry are expected to see a dramatic fall in revenue amid a downturn more severe than the one experienced in 2015.
The business outlook report from OGUK, published on Tuesday, says up to 30,000 jobs could be lost in the next 12 to 18 months if the industry does not have help to “weather this storm”.
Demand for energy has plummeted as more than half of the world’s population is in some form of lockdown, it says.
Drilling activity in the seas around the UK could be down 50% from 2019 levels, with capital investment also falling sharply.
The report calls for urgent action to support the offshore sector, saying it can “play a key role in the UK’s transition to a net zero future”.
OGUK chief executive Deirdre Michie said: “Like so many industries, our members have been profoundly impacted by Covid-19.
“With historic low oil and gas prices coming so soon after one of the most severe downturns our sector has experienced, these findings confirm an especially bleak outlook for the UK’s oil and gas industry.”
She continued: “If the UK is to maintain its supply of domestic energy, protect jobs and build the critical infrastructure it needs to transition to a net-zero future, ours is an industry worth fighting for.
“It’s why OGUK is today outlining a three-stage framework with a range of measures for governments and regulators to support industry now, stimulate a recovery and accelerate the transition to a net zero future.”
Unions representing offshore workers have also called for action to halt the “carnage” of job losses.
A report from the RMT, Unite and GMB unions says an urgent summit is needed to deal with the crisis.
Many workers who face losing their jobs have only recently been re-employed following the previous downturn, the unions say.