What’s happening to the UK’s Oil & Gas Industry?

The outlook for the Oil & Gas industry seems bleak. According to Oil & Gas UK’s Activity Survey 2015, the expenditure last year outweighed the sales earned in the industry, with investment and exploration set to fall throughout this year.

The UK has been hard hit by the fall in oil price largely due to the North Sea’s maturity which makes the expenditure to operate there ever more expensive, according to The Economist.
The price of oil plummeted after the Organisation of Petroleum Exporting Countries (OPEC) “failed to reach agreement on production curbs”, along with a number of other factors such as reduced demand in America and the expectations of the market.

The BBC reported that industry and government are working together to “try and ensure the long term success of the sector”. Chancellor George Osborne also stated that “I’ve already cut taxes in the North Sea and we’re now looking at what more we can do to work with industry to support investment in this important sector.”

As a result of the industry’s sharp decline, skills shortages and pay cuts are expected for contractors working in the sector. With expenditure outweighing costs, pay rates are likely to reduce, pushing more contractors to move to overseas jobs where the fall in oil price has had a lesser effect, leaving the UK Oil & Gas industry with a shortage in valuable skills.

On the contrary, the Bank of Scotland’s Report on Jobs published last month in relation to April, reports an increasing economy for Scotland with an increasing hourly rate for temporary workers (including those on contract basis), albeit at a “modest pace”.

For those contractors remaining in the UK, we may be able to help you during this unfortunate time for the industry. With expected falls in contract rates, make sure you are not paying too much for your insurance; our policies for those working in the energy sector are amongst the most competitive in the market at just £281 for a combined Public and Employers Liability insurance policy or £392.22 if you conduct manual work including rope access or rigging. Visit Qdos Contractor for more information.

Along with our low-priced insurance, Qdos also now offer an accounting service which goes further than any other contractor accountant by even raising your invoices for you, so you can spend more time securing contracts. Visit Qdos Accounting for more information.

Have you been effected by the drop in oil price? Leave your comments below.

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