North Sea oil slump costs 120,000 jobs – jp

File photo dated 16/03/07 of an oil rig in the North Sea, as the Bank of England deputy governor said that the all in oil prices has boosted the economy although there is "no great urgency" to raise interest rates. PRESS ASSOCIATION Photo. Issue date: Friday February 5, 2016. Ben Broadbent said the drop in global oil prices by 75% had been a "net good" for the British economy, with improvements including a rise in real wages by just over 7%. See PA story ECONOMY Oil. Photo credit should read: Danny Lawson/PA Wire©PA

Nearly 8,000 jobs have been lost from the North Sea oil and gas industry during the downturn, according to the industry body, while 120,000 roles have gone across the wider economy.

Figures released on Friday by Oil and Gas UK show that employment in the industry has fallen from an estimated 41,700 in 2014 to 34,000 today. Meanwhile the number of jobs that rely on the industry — including taxi drivers, hotel staff and caterers — has fallen from 453,800 to 330,400. The organisation said it expects the number of supported jobs to fall a further 40,000 by the end of the year.

Deirdre Michie, chief executive of Oil & Gas UK, said: “We cannot overestimate the impact the global downturn in the industry is having on the UK economy, nor the personal toll for those who have lost their jobs, and the effect on their families and colleagues.”

The statistics underline the damage caused to the economy of north-east Scotland since the middle of 2014, with the price of a barrel of crude oil dropping from about $115 to just $50 during that period.

The UK North Sea, one of the oldest oil basins in the world, and also one of the most expensive for producers, has been particularly badly hit by the slump.

Some of the biggest oil producers in the world have been making steep job cuts in recent months. Shell announced last month that it was cutting another 475 jobs in the UK North Sea, while BP said in January it was shedding 600 roles.

This has had a significant knock-on effect for the rest of the economy.

The number of people claiming unemployment benefits in Aberdeen has more than doubled since the end of 2014 and the proportion doing so has now overtaken the UK average at 2.1 per cent. House prices in the city have dropped 14 per cent in the past year.

Some are hoping that the job of taking apart oil platforms will provide an economic boost to the region but many cash-strapped companies are delaying shutting down operations to avoid heavy up front costs.

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