Report: Up to 90,000 oil jobs in Norway could disappear in the next ten years

Johan Sverdrupfeltet - Erna Solberg - Sylvi ListhaugPhoto: Carina Johansen / NTB

In a scenario with lower-than-expected oil prices, as much as 60% of oil jobs in Norway could disappear by 2030, according to a report that the government presented on Friday.

In the report, the government refers to calculations from Statistics Norway (SSB). 

These show that in 2013 there were around 230,000 people employed in Norway in jobs that could be directly or indirectly linked to the extraction of oil and gas.

But after the fall in oil prices in 2014, many of the jobs disappeared, and by 2018 the number of employees had fallen to around 150,000.

The sector is now expected to shrink even more towards 2030.

Alternative scenario

The report’s main scenario is that more than 50,000 jobs will disappear by 2030.

The starting point for this is an oil price of USD 50 a barrel and a gas price of USD 5.5 per million British thermal units (mmbtu).

But the uncertainty about prices is high, and the government has also explored a scenario where prices are lower than expected.

If the oil price suddenly falls to USD 30 a barrel and the gas price to USD 3 per mmbtu, it is estimated that as many as 90,000 of the oil jobs will disappear by 2030. That is a fall of 60% from the level in 2018.

“Such a low-price scenario means that the remaining employment related to the demand from the Norwegian oil industry will then only be about 70,000 people,” it is pointed out.

Green transition

Minister of Finance Jan Tore Sanner (H) hopes that other jobs will be created in the private sector to attract those who lose their jobs in oil and gas.

“Those who work in the oil and gas sector have skills that are important in other jobs, not least in the green transition,” Sanner told news bureau NTB.

But the report also states that there will be a great need to use the labor from the oil and gas industry in the public sector, and especially in health and care.

The declining number of oil jobs is related to projections that show that oil and gas production is likely to fall markedly in the coming decades.

By 2050, Sanner expects a reduction in total oil and gas production of 65%.

It is compatible with the global climate goals, the Minister of Finance maintains, referring to the UN Climate Panel’s calculations of how much production must fall by 2050 for the Paris Agreement’s goals to be achieved.

“Norwegian oil and gas production does not stand in the way of achieving the Paris goals,” Sanner said.

Political division

The leader of the Progress Party (FRP), Siv Jensen, fears that the oil and gas industry will face major challenges in the future. 

But according to her, it does not necessarily have to be the case that 50,000 jobs will disappear.

“It all depends on which policy you choose to pursue,” Jensen told news bureau NTB.

“We believe we must be offensive with the allocation of new exploration areas, the issuing of new licenses. We must be offensive in a situation where the world will still need Norwegian gas,” she said.

Liberal Party (V) leader Guri Melby, on the other hand, believes that politics should go in the opposite direction.

“I think we should also prepare for a steeper decline,” she noted.

Source: © NTB Scanpix / #Norway Today / #NorwayTodayFinance

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