Another 5,500 people working in the North Sea oil and gas industry in Aberdeen are set to lose their jobs within the next decade, according to Scotland’s national skills agency.
The effects of the downturn in the sector will continue to be felt in the nation’s third largest city until at least 2027, the report by Skills Development Scotland (SDS) warns.
It says those employed in the energy industry would continue to see “significant change”, with heavy job losses only partially mitigated by the expansion of other areas.
The type of employment typical in Aberdeen is set to change dramatically over the next decade, with a move towards professional, scientific, health and administrative roles, it adds.
“Oil and gas activity continues to play a much larger role in the local economy than in Scotland generally and thus the downturn in sectoral activity will constrain economic growth,” the report states.
The oil and gas industry still supports more than 300,000 jobs across the UK but around 150,000 roles have been lost since its peak in 2014, with Aberdeen particularly hard hit.
The SDS report says the energy workforce will continue to be a “great asset” for the city in the years ahead, urging ministers to use their skills as Scotland moves towards a low-carbon economy.
Adam Davey, market intelligence manager for trade body Oil & Gas UK, said the “key priority” must be attracting fresh investment in the North Sea to protect jobs.
“Predicting employment levels in the oil and gas industry will depend on future levels of investment and the type of activity that will be taking place on the UK continental shelf,” he added.
Reforms needed The Scottish Government formed a new group to support the oil and gas sector in September last year, aimed at taking forward the work of the Energy Jobs Taskforce.
However, the SNP said the UK Government must go “further and faster” with its reforms to the sector, calling for new incentives for exploration and development in the North Sea.
Gillian Martin, the party’s MSP for Aberdeenshire East, accused UK ministers of being “slow and stubborn” in implementing reforms.
“Almost all of the levers to incentivise growth and ensure a healthy future for the oil and gas industry remain in the hands of the Tory government at Westminster,” she added.
In November’s Budget, Chancellor Philip Hammond announced new tax breaks which will make it easier for oil fields nearing the end of their life to change hands.
A Transferable Tax History for oil and gas fields will be introduced in November this year, encouraging small firms to come in and extract the last of the resources.
Colin Clark, Scottish Conservative MP for Gordon, urged the SNP to rethink its “high tax agenda”, arguing that it would “do nothing to aid economic growth”.
A UK Government spokesman said: “We have set out extensive support for Scotland’s oil and gas industry, including £2.3bn worth of tax cuts since 2015.
“We are doing everything we can do maximise the value of our oil and gas reserves.
“This includes £5m to support oil exploration and investing £250m in the Aberdeen City Deal to boost the whole economy of the North East, which will help prepare Scotland’s crucial oil and gas industries for the future.”