Up to 30 thousand workers in the UK oil and gas industry will be laid off, and industry revenues will decline by almost 40% compared to last year.
Such forecasts were made for the industry on Tuesday, April 28, by the British non-governmental organization Oil & Gas U.K.
Analysts believe that the crisis could last for the next 12-18 months.
“The prospects are bleak compared to the picture of sustainable growth observed only two months ago,” the report said.
According to estimates by Oil & Gas U.K., revenue from production on the UK continental shelf this year could fall to 15 billion pounds [18.7 billion dollars]. Last year, this figure reached 24.5 billion pounds.
Moreover, if the average price of Brent oil this year is $ 35 per barrel, the British oil sector will not even be able to recoup the costs.
“It is possible that this year, the UKCS [Continental Shelf of the United Kingdom] will face negative cash flow for the third time in 40 years since the pool first saw positive cash generation,” Oil & Gas U.K.
So that British oil producers could go to zero, they need Brent crude oil on average at $ 40 per barrel. Currently, the price of July Brent futures is approximately $ 23 per barrel.
Such realities make oil industry workers expect a reduction in drilling volumes of more than a third – to the level of four years ago.