A quarter of Britain's oil jobs - some 120,000 workers - could have been culled by the end of this year, according to a new report. As Kirsty Basset reports, high production costs are still weighing on the UK sector despite a recent surge in crude prices.
Oil jobs in Britain are drying up, amid low oil prices. As many as 120,000 workers - around a quarter of the sector's workforce - will have lost their jobs by the end of the year, compared to mid-2014, according to a report by Oil and Gas UK. It follows the slump in oil prices from as high as $115 a barrel two years ago, to around $52 a barrel. (SOUNDBITE)(English) OANDA MARKET ANALYST CRAIG ERLAM SAYING: "The period of oil prices being above a hundred dollars was masking over the problems that there was within the British oil industry and it's taken oil to fall to extremely low levels to bring these to the surface and now this is the time when we are going to have to see companies adapting to this new oil environment." And that means job losses - Royal Dutch Shell, BP and Chevron have already announced cuts this year. Further mergers and acquisitions could be on the cards too. (SOUNDBITE)(English) OANDA MARKET ANALYST CRAIG ERLAM SAYING: "M&A activity over the past couple of years has been extremely high and I wouldn't be surprised if we see a lot more of it to come (from the oil industry)." Despite a rally in oil this week, prices are expected to remain subdued in the longer term. (SOUNDBITE)(English) OANDA MARKET ANALYST CRAIG ERLAM SAYING: "We've got to remember that a lot of the supply disruptions are temporary disruptions. Things like the fires in Canada for example. And when these do start coming back on line then I do think the oversupply pressures will start to drive oil back towards the 40-50 dollar region." Not good news for Britain's North Sea industry, one of the world's most mature oil basins that has been in steady decline since reaching peak production in 1999.