In a new, still unpublished report, presented by consulting agencies Menon Business Economics and DNV GL, it was estimated that up to 200,000 FTEs may disappear in Norway because of the downturn of the oil industry. The report was prepared on behalf of OG21, a cooperative organization for the oil industry in Norway.
The report concludes that the recession will lead to a loss of at least 100,000 man-years between 2014 and 2020. “But this is a conservative estimate”, writes Teknisk Ukeblad, the worst scenario is that 200,000 FTEs might disappear during this period. According to the International Research Institute of Stavanger there are in total 330,000 jobs related to petroleum industry in Norway.
But one of the main conclusions drawn by Teknisk Ukeblad from the new report is that along with the loss of jobs that the industry is experiencing now, another consequence of the downturn may be that the industry will lose a generation of young, innovative people. We are already seeing fewer seek petroleum-related studies. Although there are still enough good candidates to fill the places of study, the decline reflects an impairment of the belief that the industry can offer secure jobs, stays in the report.
“At the beginning of the recession there usually happens a concentration leading to the strengthening of expertise. This is because the jobs with least expertise disappear first. But once the fat is gone, the destruction of muscles starts. Here is where Norwegian oil industry is now”, writes DNV GL and Menon in the report.
It is also important to mention, says Ida Amble Ruge, the project manager in Menon, that the report talks about FTEs, not the number of employees. “We have not taken into account the labor that goes over to other industries. This is a gross figure for oil industry and related segments. We’ve already seen that at least 25,000 have lost their jobs, and that NAV comes with numbers that total 35 to 40,000 have been notified of layoffs and dismissals”, says Ruge to Teknisk Ukeblad.
There will be a massive negative economic impact of the reduced activity in the oil industry. “We expect that government revenues from the oil companies will be reduced by 100 billion”, the report said.
OG21 – a cooperative organization between oil companies, universities, research institutions, suppliers and governments to develop and implement a national technology strategy for Norway.