UK Edition
Thousands more job losses are to hit the North Sea oil industry in the coming months as a price crunch forces producers to halt investment, the billionaire founder of Wood Group has warned.
Sir Ian Wood said activity in the UK’s oil sector “will not pick up in the next 18 months”, after prices slumped as Covid-19 rattled energy markets.
“We’ve lost 7,500 in April, May and June and I think we could easily lose another 7,500 in the next three or four months,” he said. “That’s just with oil operators taking pretty immediate steps to cut back on their proposed investment for 2020 and into 2021.”
Sir Ian, who left the oilfield services giant in 2012 after 50 years, said current prices of just above $40 per barrel marked “a very significant reduction” for the sector. He added the recent price plunge would lead to a “faster shift towards energy transition”.
“We are very dependent on oil and gas, and a balanced economy will now have a much better chance with the growth of the new energy industries,” added Sir Ian, who chairs Opportunity North East, an organisation funding economic development in the region.
The North Sea oil and gas division of Sir Jim Ratcliffe’s chemicals empire Ineos suffered during 2019 as oil prices edged lower prior to the pandemic.
Accounts published last week showed the division slumped to a pre-tax profit of £20m for the year ending December 2019, compared with a £375m profit the year before.