More than three in ten UK oil and gas firms plan to make further redundancies in the next year

More than three in ten UK oil and gas firms plan to make further redundancies in the next year, according to a new survey of the sector.

In a new report examining confidence within the oil and gas sector, the Bank of Scotland/Lloyds Banking Group report found 63 per cent of Scottish firms had made redundancies in the last year.

Stuart White, Bank of Scotland/Lloyds area director, North of Scotland, said the report showed “there are still choppy waters to navigate”.

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The report, 'Re-evaluating Strategies', was based on a survey of over 140 firms.

It found that there was only one new job created for every six lost in 2015.

Meanwhile 57 per cent of firms said they had been severely or quite badly affected by the fall in oil prices.

But 55 per cent believe there are new opportunities, with 57 per cent of larger firms saying they plan to examine ways of diversifying into nuclear decommissioning.

The report found 57 per cent of firms said their strategy was based in collaboration with other firms, while 55 per cent plan to target new international markets.

White said: “Clearly the last year has been an exceptionally challenging one for the industry, and at a time when so many firms are having to plan and take reactive measures, I hope that our findings will prove especially valuable.

“The decline in the price of oil has made headlines around the world, and its knock-on impact on investment and employment has created economic headwinds that are being felt, not just by the industry but across the wider economy.

“At the time of writing, the price of oil was hovering around $50/barrel, and the hope is that prices have bottomed out and have begun to slowly and modestly recover. No one has a crystal ball, but when asked about oil prices, the majority of our respondents anticipate “lower for longer” pricing and don’t expect Brent crude to recover to a sustained level of $75-80/barrel until 2020 or later.

“Though there are undoubtedly more difficult decisions to be taken on cost savings, jobs and investment, cautious optimism for the future outlook appears to be slowly returning.”