In the Scottish city of Aberdeen, known as the Oil Capital of Europe, thousands of job losses have hit not just those working in the oil industry, but also in the local economy. Joel Flynn reports.
Aberdeen was founded on the granite industry just a few centuries ago, but since then has come to be known for one thing - oil. Much of the UK's oil industry has located itself in this part of North East Scotland. But the money, like the oil itself, is now drying up. In the last 18 months, oil companies have cut costs by as much as 40 percent. Oil and Gas UK, a group representing Britain's oil industry in the North Sea, point out that production efficiency has also increased in that time - but risks for the future are growing. (SOUNDBITE) (English) OIL AND GAS UK CHIEF EXECUTIVE, DEIRDRE MICHIE, SAYING: "There is this gap opening up in terms of exploration. We're at the lowest levels we've ever seen, and there's also a gap in terms of the investment levels opening up, and that's no surprise, if you've seen the revenue taken out of your industry to the extent that it has been, it's not a surprise that you then see investment levels drop to the way it has dropped." Oil and Gas UK have warned that without more investment into the North Sea, Britain's oil output could halve by 2025. (SOUNDBITE) (English): UNIVERSITY OF ABERDEEN PROFESSOR OF PETROLEUM ECONOMICS, ALEXANDER KEMP, SAYING: "Even if the North Sea goes into long term decline, the world oil industry will continue to grow for quite some time, and the industry here has already demonstrated that it can compete internationally. So I'm quite optimistic that in the long run we'll still have quite a substantial export related industry here." Aberdeen isn't the only part of Europe being hit hard by oil's slump. In the UK, Newcastle and East Anglia have also seen job losses, while Norway and other countries near the North Sea are all having to re-evaluate their industries. In Aberdeen though there is now a growing sense that some of the oil industry boats may never be coming back.