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North Sea workforce to make up majority of furlough figure as redundancies loom

Oil workers offshore.
Oil workers offshore.

North Sea oil industry workers are anticipated to make up the lion’s share of those using the furlough scheme within the UK energy sector.

New figures released by HMRC show that 16,300 energy industry staff have used the UK Government Coronavirus Job Retention Scheme at a £39 million cost to the Treasury.

Around 600 UK energy firms applied to use the scheme.

Despite HMRC not providing a sector specific energy breakdown, offshore unions and representative body Oil and Gas UK (OGUK) said they expect “the huge expanse” of North Sea support services to make up the majority of the furlough figure.

Jake Molloy, RMT regional organiser, said: “As a conservative estimate, I would be put the figure around 5,000 to 5,500, and just for the offshore oil and gas sector – onshore it could be double that because we know a lot of office staff have been furloughed.

“And then you’ve got the wider supply chain involving consultants, support services, inspection firms and tech companies.

“It’s a wide net that gets cast when you’re talking about the oil and gas supply chain.”

Data provided by the Department of Business, Energy and Industrial Strategy (BEIS) in 2019 showed that the North Sea industry accounted for 70.3% of total energy employment in the UK.

However, OGUK has warned the sector could face 30,000 direct and indirect job cuts in the next 12-18 months due to the fallout from the Covid-19 pandemic.

North Sea giant BP announced it would cut 10,000 jobs this week, with 2,000 expected to hit its UK workforce.

Mr Molloy said the sector needed UK Government intervention and support “very, very quickly”.

He said: “We need to get after this at pace or we will lose thousands more and we’ve got the end of furlough coming where we’ll see the number rise quite rapidly.

“We need government support sooner rather than later – that is critical.”

OGUK workforce engagement and skills manager Alix Thom described the furlough scheme as a “lifeline” for many oil and gas companies during the coronavirus pandemic, but added that the sector was now facing “a double whammy of low commodity prices and the constraints of Covid-19”.

She continued: “This means that our sector faces an especially uncertain and testing future, with reduced revenues likely to remain even as the UK gradually eases lockdown.

“Many will appreciate that furlough scheme cannot be extended indefinitely but with our recent report warning up to 30,000 jobs could be lost it is clear decisive action will be required.

“This reinforces the need for the oil and gas industry to continue close working with regulators and government to protect jobs, support the sector’s recovery and ultimately accelerate the transition to a lower carbon future, key to providing fresh work to our struggling supply chain.”

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