THE UK’s oil and gas sector is set to create a further 39,000 jobs over the course of the next two years, according to a new report.
The latest research Bank of Scotland published today suggests that almost 400 new jobs will become available every week as the vast majority of companies are confident about their ability to expand.
As well as new international markets, many firms hope to get involved in shale gas – the controversial fossil fuel obtained by fracking, which has taken off in North America but faces regulatory hurdles on this side of the Atlantic amid fears over its ecological impact.
When asked about diversification, nearly half of all companies said they were interested in branching out into shale gas.More than a third of oil and gas firms said they were interested in diversifying into renewables.
The sector, which includes engineering and consultancy firms as well as those directly producing or exploring for oil and gas, already employs about 500,000 people in the UK.
The estimate shows the pace of expansion is picking up – last year executives had estimated that the industry would add 34,000 jobs over 24 months.
Scotland’s oil hubs around Aberdeen and in the Northern Isles mean it should get the lion’s share of the extra employment.
Bank of Scotland commercial area director Stuart White said: “The findings of this report are excellent news for the economy, demonstrating the employment-generating nature of the oil and gas industry now and in the future.
“With most of the UK’s oil and gas firms clustered in Aberdeen and the north east, Scotland should reap the largest share of these new jobs. However other parts of the UK will benefit from expansion plans.”
The survey, carried out over “a broad cross-section” of UK oil and gas companies, is the bank’s third annual report on the sector.
It found that confidence remains high, with 69 per cent of executives feeling positive about their companies’ growth prospects in 2014 and 2015. However the figure is slightly down on the 77 per cent who predicted growth last year.
International expansion was a priority for 64 per cent of those asked, up 5 per cent on last year’s results. Africa is the priority market for future investment with over a fifth targeting growth there, while North America and the Middle East also remained key areas for investment.
With international income accounting for 44 per cent of turnover, almost half of exploration and production companies said they were already planning further growth in foreign markets in the next 24 months.
Mr White said the figures demonstrated the global nature of the industry, as more firms look to expand internationally and tap into the markets with the largest levels of recoverable oil and gas reserves.
“With 44 per cent of income already generated internationally, this is not a new trend, and reflects the reach UK firms have as the industry benefits from the expertise gained in the challenging North Sea environment,” he said.
But the report also highlights the growing challenges posed by the lack of skilled workers available to fill the growing number of vacancies.
More than a third of the companies surveyed said the shortage of skills was the greatest challenge they are facing, up slightly from last year. The availability of skilled workers was the most challenging for engineering companies, while just one in five of those involved in exploration and production felt it was an issue.
Dr Alix Thom, who is in charge of employment and skills at industry body Oil and Gas UK, said that although the sector continues to attract a huge amount of investment, with last year alone seeing record levels of £14.4 billion, there is an undeniable skills shortage, but it is being addressed.
He said: “The industry is actively addressing the skills shortage in the short and long term in a number of ways. For example, attracting school leavers and graduates by engaging with young people to encourage the uptake of STEM (science, technology, engineering and maths) subjects and stimulate interest in the sector.”
“The industry has also succeeded in persuading a number of retirees to return to the workforce through flexible arrangements.”