Yet again, oil and gas job losses are hitting the headlines, with BP being the first major UK player this year to announce thousands of redundancies, hot on the heels of the biggest job losses experienced in the sector for decades throughout 2015.

In the context of an industry already suffering a skills shortage, recognized by all to be a threat to future growth, the loss of skilled workers through layoffs has the potential to become a major risk for employers. Whilst the UK government has responded last week with a £12m fund to help redundant oil and gas workers re-train and retain licences in an attempt to keep skills within Aberdeen and the North Sea, the impact of further job losses cannot be understated.

The surprise winner in these difficult times is the offshore wind sector. With many synergies with traditional energy, transferrable skills from the oil and gas sector are in demand in this growing sector, attracting new investment and garnering the continued support of the UK government. With the Supreme Court ruling that a wind farm offshore of Aberdeen can go ahead despite the protestations of the likes of Donald Trump, now somewhat out of favour with the Scottish government, the prospect of further offshore wind investment into the region can only spur on the exodus of skills from oil to renewables, albeit at least retaining the skills within the North Sea region. So it seems that the loss for oil and gas is the offshore wind sector’s gain.

Whilst in the past, it has been possible to limit the skills shortage by pulling in talent from around the world, notably from Asia, the UK Migration Advisory Committee are proposing to make visas for skills shortage posts more difficult to obtain. 

If implemented, these changes may well add to the concerns of a “brain drain” from the oil and gas sector, and cause further issues for oil and gas companies in the future when they are seeking to replace talent lost to the offshore wind sector. To make matters worse, the changes would inevitably make it more expensive for businesses to employ foreign labour, especially those that have a large number of employees on Tier 2 visas.

By any measure, 2016 is shaping up to be even harder on oil and gas employers than 2015. Let’s hope there is some good news on oil price to report as the year goes on.

First published in Energy Voice, February 2016