More than 4,000 North Sea oil rig workers lose job amid Covid-19 crisis

The North Sea’s workforce has fallen by 40% within two weeks as oil companies cut the size of their offshore oil rig teams to help stem the spread of the coronavirus.

More than 4,000 rig contractors have lost their jobs in the wake of the UK lockdown, during a difficult year for the oil industry after the collapse of global oil prices.

The number of workers operating the North Sea’s oil and gas platforms typically stands at about 11,500, according to Oil and Gas UK, but the number of people operating the rigs has already fallen to 7,000.

UK government support for workers and businesses during the coronavirus crisis

Direct cash grants for self-employed people, worth 80% of average profits, up to £2,500 a month. There are similar wage subsidies for employees.

Government to back £330bn of loans to support businesses through a Bank of England scheme for big firms. There are loans of up to £5m with no interest for six months for smaller companies.

Taxes levied on commercial premises will be abolished this year for all retailers, leisure outlets and hospitality sector firms.

Britain’s smallest 700,000 businesses eligible for cash grants of £10,000. Small retailers, leisure and hospitality firms can get bigger grants of £25,000.

Government to increase value of universal credit and tax credits by £1,000 a year, as well as widening eligibility for these benefits.

Statutory sick pay to be made available from day one, rather than day four, of absence from work, although ministers have been criticised for not increasing the level of sick pay above £94.25 a week. Small firms can claim for state refunds on sick pay bills.

Local authorities to get a £500m hardship fund to provide people with council tax payment relief.

Mortgage and rental holidays available for up to three months.

North Sea companies have cut their teams back to a skeleton staff and cancelled all non-essential work to help workers physically distance during the outbreak and reduce costs amid the oil downturn.

The UK oil company Cairn Energy became the latest North Sea oil producer to scale back spending plans. It told investors on Friday it planned to cut its budget for the year by almost a quarter to weather the oil price crisis.

Cairn will shave $20m (£16m) from its North Sea spending plans to $45m, and will reduce its capital expenditure in Senegal by $70m to less than $330m. The company also plans to cut spending on exploring for new oil and gas reserves by a third, to $100m.

Similar spending cuts have been made by most major oil companies, which is likely to deal a blow to the engineering and equipment services companies which support major oil projects.

Industry trade unions and the Scottish Trades Union Congress are due to meet Scotland’s energy minister, Paul Wheelhouse, later on Friday to discuss plans to future-proof the skilled workforce.

Mick Cash, the general secretary of the RMT trade union, said there had been “a gaping hole” in the government’s response to the offshore impact of the coronavirus.

“Employers have failed to engage with offshore trade unions over standardising the industry’s response to coronavirus, even when there have been cases diagnosed on North Sea platforms, yet the UK government stands by and watches thousands of skilled energy workers being dumped without any comment whatsoever,” he said.

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Rystad Energy estimates that more than a million workers who provide oilfield services are likely to lose their jobs in 2020 as oil companies scramble to cut their costs. Companies are likely to lose 8% of their staff due to the coronavirus outbreak and 13% due to the collapse of global oil prices, the consultancy said.

Weir Group, a FTSE 250 engineering services firm, said on Thursday it would cut its dividend amid fears that oilfield service companies would be the first to bear the brunt of the downturn. James Fisher & Sons, which supplies equipment to offshore projects, said it would suspend its final dividend and cut spending, including a freeze on directors’ salaries.

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