Oil and gas jobs boost as govt opens 28th licensing round

Thursday 30 January 2014

Now is a good time to be a UK limited company in the oil and gas sector and things will only get better as the government opens the 28th licensing round.

Firms are now able to apply for a new license to drill for offshore oil and gas - a move the government claims will enhance energy security, support thousands of jobs and provide billions in increased tax revenues.

Energy minister Michael Fallon said: "There continues to be extremely high level of interest in North Sea oil and gas, which is unsurprising when there could be as many as 20 billion barrels of oil still buried deep within the seabed. This new round of drilling for offshore oil and gas will help boost growth, energy security, and jobs in the UK."

Currently, the oil and gas sector supports around 350,000 jobs in Britain, generating £14 billion of capital expenditure last year alone.

The robustness of the sector means the UK is able to meet around half of its own primary energy needs domestically.

By opening the 28th licensing round, the government is furthering its joint Oil and Gas Industrial Strategy, which is designed to secure investment and production in the North Sea for future generations.

At the 27th licensing round, a record number were awarded. Recipients included 21 new entrants and there are now 50 companies working in the North Sea.

In 2013, 36 offshore projects were approved. These had an associated capex of over £9 billion and tax revenues of £6.5 billion on production.

Last year's efforts also brought in £5 billion in corporate and payroll taxes through the wider supply chain.

However, growth could be stunted if the skills shortage isn't addressed, according to the Aberdeen and Grampian Chamber of Commerce (AGCC).

In its 19th Oil and Gas Survey, the organisation found recruitment and retention were cited by more than two out of three contracting companies and nearly 70 per cent of operators.

AGCC observed the challenges were greatest when hiring for managerial or professional roles.

Consequently, businesses are being forced to source talent outside of the UK, with 50 per cent saying staff losses were at least partially the result of workers moving to other international oil hotspots.

Three out of ten firms are now looking to other sectors to recruit suitable candidates, up 13 percentage points from a year ago.

Currently, oil and gas employment in the UK is spread between Scotland (45 per cent), south-east England (21 per cent), north-west England (six per cent) and the West Midlands (five per cent).

Aberdeenshire is the most active region, accounting for around 39 per cent of total employment.

Forecasts suggest the next five years will see a need for an additional 15,000 employees to meet demand.

AGCC found more than seven out of ten contracting companies and 50 per cent of the operators are expecting the number of employees in their organisation to grow over the course of 2014.

Robert Collier, chief executive of AGCC, said: "This time, we are reporting our highest ever reported level of companies recruiting in the contracting sector.

"This brings challenges around how vacancies will be filled but we fully expect the sector to meet these challenges and continue to deliver for the north-east, Scottish and UK economies."

By Victoria McDonnell

Get in touch

Please select your type of enquiry:

Brookson on Twitter