One of the buzz phrases that’s going around just now is ‘lower for longer’.
Not that long ago, in the summer of 2015 even, there was much more optimism around the oil industry. Companies and Industry representatives were expecting a light at the end of the tunnel to come soon after the big crash in the oil price in the last 6 months of 2014, it just hasn’t recovered this year and continues to fall.
Estimates suggest that 65,000 jobs have been lost so far as a result of the low oil price and the maturity of the North Sea. A continued low price, possibly dropping below $25 a barrel is a really worrying prospect and has implications for the future of Aberdeen.
As time goes on, the pain is being felt more and more throughout the North East. It’s not just the redundancies that are causing problems either. Even those who still have jobs are facing cuts in pay and cuts in conditions.
Most home owners are casting a worried eye over the property adverts just to find reassurance, even those who do not work in the oil industry feel their prospects are connected to the price of oil.
Renters at least are finding some reprieve from spiralling rents and easing the pressure on them might be the only sliver lining.
Speaking to Aberdeen airport, they have seen a dramatic reduction in the volume of helicopter traffic. Contractors have been really finding it difficult for the best part of a year to get work in the industry.
Some of the guys are heading abroad in order to keep their skills current and keep finances coming in, but that’s far more difficult with a family and children at school. Companies are making major decisions to reduce holiday entitlement and change shift patterns.
Throughout my lifetime, Aberdeen has relied on oil. So many families I know receive the vast majority of their income from employment in the oil industry. We cannot afford to lose these vital skills.
And we cannot, under any circumstances, compromise safety on the rigs in order to increase productivity.
Right now, we need to be helping to diversify industries in the city so that we retain people and employment in Aberdeen.
It has been reported that some feel decommissioning should be brought forward in order that this generate and secure jobs in the industry. This cannot be a sensible way forward. The earlier decommissioning happens, the bigger the risks to the future of the industry in the North Sea.
As rigs are decommissioned, other finds become less financially viable, reducing the volume of oil we will be able to extract and damaging the future for the industry.
Aberdeen has weathered an oil price crash before so I expect that we will get through the current downturn. Many are feeling the pain now and help for the industry has to come from the Treasury to make the North Sea industry is more affordable.
We also need the City Deal to really deliver for Aberdeen both to support our existing industry and to diversify and create new jobs.
Kirsty Blackman is an MP for Aberdeen North