This past year has seen a difficult time for the oil and gas industry, over 1,500 jobs have already been lost and now Ian wood, author of a state-ordered report, has warned that a further 15,000 roles dependent on the industry could suffer the same fate in upcoming months.
Big players in the industry such as BP Plc, Total SA and Royal Dutch Shell Plc will all be making cuts here including reducing of staff, limiting investment and closing certain operations.
John Taylor from Unite’s regional organisation said: “The 1,500 redundancies; that’s just the start… Half of that is drilling. There’ll be more construction workers later as projects come to an end in the next two months.”
It has been reported that more than a third of U.K fields are uneconomic at the current oil prices, forcing many to closure or at least job losses- BP has already seen a loss of 300 jobs this year alone.
However the worst may not be over yet. Experts have given estimations that investment will drop by more than 50% in the next year, with this increasing rapidly to 70% by 2018 due to the low oil prices and high U.K. taxation, something which Ian Wood has recently been contesting.
Taxation has been subject to recent talks, and it is expected that George Osborne, Chancellor of the Exchequer, will bring in field allowances which reduce taxation to below 50% and thus encourage investment. However Ian Wood maintains that “this is still too high… The net effect should be below 40 percent to change the mind and mood of investment in the North Sea.”
The treasury have refused to comment on their plans, and whilst these proposals may not quite fulfil the extensive demands of the industry it is a significant development and will certainly help to secure continued investment.
Whilst we recognise the tough times that have recently faced by the oil and gas industry within the UK, we remain optimistic that this will turn around and taxation reviews are certainly a step in the right direction.
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