Contribution to the UK Economy

Contribution to Employment

In 2006, the total employment provided by the oil and gas sector in the UK was estimated to have risen to 480,000, of which 380,000 were involved in domestic production; they comprised 30,000 people in oil and gas companies and major contractors, 260,000 within the wider supply chain and 90,000 supported by economic activity induced by oil and gas employees’ spending throughout the economy. Up to an additional 100,000 people are employed in export activities by supply chain companies. The number of jobs involved in domestic production is not expected to increase further in 2007, given the lower investment forecast, but there could be increased demand for people in export markets.

Figure 8: UK Oil and Gas Industry Employment 1991-2007 (excluding export activity)

A recent Oil & Gas UK study has revealed a more optimistic picture for industry demographics than was commonly perceived. The average age for the total workforce offshore was found to be 41 years which is the expected average for a workforce generally ranging from 20 to 60 years old.

Figure 9: UK Oil and Gas Industry Offshore Employment by Age 2006

Individual age profiles for occupational categories demonstrate that the workforce is distributed fairly evenly in some occupations like production and electrical roles, but weighted in others. Offshore installation managers and rigging personnel show a much higher age distribution than, for example, those providing well services.

The numbers of females employed by the industry has increased gradually during recent years. In 2006, slightly fewer than 1,800 were working offshore, the majority employed in the catering sector. The age profile for female workers was weighted towards the younger age brackets, with an average of 34.1 years.

All occupations demonstrate a need for continued recruitment efforts amongst the under-24s to avoid a potential shortage in due course. This is particularly important in those occupations with higher average ages. Recruitment efforts are also required in the 30-34 age bracket, to avoid a potential shortage of supervisory personnel in future, although the recruitment of skilled personnel from other sectors is one potential solution for this. However, oversubscribed training and graduate schemes run by operators and industry bodies such as OPITO suggest that the issue may not, contrary to various reports, be the attractiveness of the industry.

Looking at the broader picture, there are distinct regional clusters of oil and gas employment within the UK. Over 100,000 highly skilled oil and gas jobs are provided in Scotland alone because of the presence of the industry. When total economic activity is included, the industry provides employment for around 150,000 people in Scotland. Four parliamentary constituencies in the Aberdeenshire area account for no less than 38% of all UK jobs supported by offshore oil and gas. Outside Aberdeenshire, other regions enjoying substantial employment associated with the industry are Eastern England (5%), North West England (6%) and South East England, including London (21%).

Note: These percentages refer to the proportion of the total jobs supported by the industry which are in these areas.

Figure 10: UK Oil and Gas Industry Employment by Region 2004

Examining the distribution of supply chain jobs indicates that the range is diverse. However, a few key sectors are especially noteworthy: metal products, construction and engineering account for 16%, 15% and 8% of total jobs respectively. There are also substantial purchases from banking, finance and insurance (5%), the legal sector (8%) and “other business and professional services” (12%).

Figure 11: UK Oil and Gas Industry Employment by Sector 2004

The numbers on the map below, Figure 12, refer to Westminster’s parliamentary constituencies. A full list of these constituencies may be found on Oil & Gas UK’s website at
http://www.oilandgasuk.co.uk/issues/economic/index.htm.

Figure 12: UK Oil and Gas Industry Employment by Parliamentary Constituency