120,000 UK jobs to go because of low oil price, says industry body

By the end of the year 120,000 jobs will be lost in the UK due to the low cost of oil, according to the energy industry body.

Oil and Gas UK, in a report on Thursday, said indirectly related jobs such as taxi drivers, hotel staff and caters will fall to 330,400 by the end of 2016, down from 453,800 in 2014. A further 40,000 jobs are expected to go by the end of the year.

The report said that jobs in the oil and gas industry have fallen from about 41,700 in 2014 to 34,000 today.

Nearly 8,000 jobs have gone from North Sea oil, one of the oldest basins in the world and one of the most expensive.

Since the middle of 2014 a barrel of crude dropped from about $115 to about $50 today. The downturn in the oil industry has affected the economy of Scotland, where half of British jobs are located. In response, the Scottish government set up a task force help people find employment elsewhere.

Deidre Michie chief executive of Oil and 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 total employment we will sustainably provide depends on the level of investment attracted into the basin. If investment falls, then so will jobs.”

To rein in revenue costs due to the low oil price big industry players like BP, Royal Dutch Shell and Chevron have announced jobs cuts. Two weeks ago Shell announced 475 jobs will go in the UK and Ireland, part of their global plan to cut 12,500 by the end of the year.