Contractors in the North Sea plan to lay off almost one in five UK-based workers this year, a new report has found.
The latest oil and gas survey is the “most negative” yet, according to a partner at its sponsors, law firm Bond Dickinson.
It found that three-quarters of North Sea oil and gas contractors are “less confident” about their prospects than they were a year ago.
Confidence levels have marginally improved from their record low in November, however.
Firms reported a 15% fall in UK staff in the past 12 months and expect a further 17% of staff to lose their jobs this year – almost triple the 6% predicted six months ago.
About one in four companies (24%) said their top priority is cutting costs while 42% said it was increasing efficiency and productivity.
The survey by Aberdeen & Grampian Chamber of Commerce and the Fraser of Allander Institute found 14% of contractors working at or above optimum levels in the UK Continental Shelf (UKCS) compared to 79% three years ago.
The level of demand, commodity price and economic climate were the top factors limiting activity in the North Sea.
No less than 42% of firms expect to reduce investment in the next two years, while 12% plan to increase it.
One projected area of growth is decommissioning, with 85% of contractors expecting to increase their involvement in the sector.
Uisdean Vass, oil and gas partner at Bond Dickinson, said: “Six months ago I described the 23rd Oil and Gas Survey as the most negative we had experienced. Unfortunately this, the 24th survey has surpassed it.”
