Update on the offshore oil and gas industry

Circular No: NP/146/17


HO ref: S2/6 S3/7

21st September 2017

Dear Colleagues

Update on the offshore oil and gas industry

Further to circular no.083/16 of 8th March 2016, a report issued over the summer by industry body Oil and Gas UK (OGUK) clearly shows the extent to which employers have exploited the lack of effective employment rights in the offshore industry, to slash labour costs and protect profits from the fall in oil prices.

The OGUK ‘Economic report’ shows that a total of 161,000 (34%) jobs were lost between 2014 and 2017, including 13,000 (31%) of directly employed installation staff. The industry remains a large employer, with over 300,000 jobs in total still remaining and job losses slowed between 2016 and 2017, largely due to a slight recovery in brent crude prices over that period.

The report also shows a significant skills deficit, with the industry and supply chain reliant on over 30,000 offshore workers from outside the UK. Many of these workers will be seafarers on offshore supply vessels, vulnerable to the sort of ill-treatment experienced by the crew of the Malaviya 7, who remain stranded in Aberdeen, owed over $650,000 in back pay. The OGUK report is available here:

Employers continue to increase the number of types of employment in the industry, including zero hour contracts, justifying these exploitative forms of employment through the UK Government’s policy of ‘Maximising Economic Recovery’ of remaining oil and gas reserves. This is clearly unacceptable and renders the offshore oil and gas industry less attractive, particularly to young people, reducing the economic and social benefits of the industry to Scotland and the UK.

We are also concerned at the industry’s reliance on overseas labour in the decommissioning sector, the only area of the offshore oil and gas industry where expenditure is growing. OGUK estimate over £17 billion will be spent on decommissioning to 2025, with much of this public money. It is essential that the UK’s departure from the European Union is accompanied by a major investment in UK offshore oil and gas skills, including decommissioning and we are pressing the UK and Scottish Governments on these key points as Brexit approaches.

Your union has also made significant steps in gaining recognition and inclusion in a revised Offshore Contractors Partnership Agreement. This is a major step forward and will strengthen the union’s ability to effectively campaign and represent our offshore members’ interests. Discussions with our fellow offshore unions and the contractors will start shortly and you will be kept updated of progress and the content of the final, revised OCA agreement.

In 2016, oil and gas met over three-quarters of the UK’s energy need, with 60% of that supply coming from the UK sector of the North Sea. Oil and gas will continue to contribute the majority of the UK’s energy supply over the coming decades and over 20 billion barrels under the North Sea remain viable.

I also remind members of the £12m Oil & Gas Transition Training Fund which was set up last year following discussions between RMT, the other offshore unions and the Scottish Government. The fund provides financial support to offshore workers to keep their Basic Offshore Safety Induction and Emergency Training (BOSIET) and other essential qualifications updated. It is specifically designed to help offshore workers made redundant during the downturn since 2014, to keep their qualifications updated. It also offers training grants to offshore oil and gas workers who want to improve their qualifications or retrain to look for work in related fields of energy or engineering.

The Oil & Gas Transition Training Fund is administered by Skills Development Scotland and further details are available on this website: https://transitiontrainingfund.co.uk/  

I would be grateful if you could bring the content of this circular to the attention of all members in your branch. You will be kept updated of further developments.

Yours sincerely
Mick Cash
General Secretary