Global Oil Job Loss Numbers in 2020

Global Oil Job Loss Numbers in 2020
A new Rystad Energy analysis has provided insight into oil and gas job loss figures around the world in 2020.

A new Rystad Energy analysis has provided insight into oil and gas job loss figures around the world in 2020.

The study highlighted that the world’s top oil and gas employer, China, lost 5.3 percent of its workforce last year, with the country’s total oil and gas jobs declining to around 2.92 million workers in 2020 from almost 3.09 million in 2019.

Rystad outlined that oil and gas employment in the world’s second largest employer, Russia, declined by 1.5 percent, with 18,000 workers losing their jobs in 2020 from 2019’s total of 1,242,500 employees. In the U.S., the world’s third largest oil and gas employer, staffing was said to have fallen to about 960,000 employees in 2020 from around 1,080,000 in 2019.

The study also revealed that the UK lost 6.3 percent of its oil and gas workforce last year, while Norway’s headcount was reduced by about 3.6 percent and Brazil’s fell by 1.8 percent. Australia was said to be the worst hit country in relative terms, with its workforce estimated to have fallen by as much as 26 percent in 2020 from 2019 levels, losing nearly 30,000 employees.

“The Covid-19 pandemic not only devastated oil demand in 2020 but also forced the global oil and gas industry to severely downsize its staffing levels. However, not all producing countries were affected in the same way,” Rystad said in a company statement.

“China lost only 5.3 percent of its massive workforce. The toll in the U.S. was more devastating, estimated at 11.1 percent, thereby faring worse than its European peers and Russia,” Rystad added.

Rystad noted that in China, most oil and gas production is nationalized and that job cuts are difficult to make. Operators must instead optimize costs by curtailing new project investments and controlling production, according to Rystad, which added that the high labor intensity of the country’s oil and gas industry pressures operators to limit headcount reductions in a bid to maintain high production levels.

Rystad said high employment numbers in China are in part driven by low technology adoption across the country’s oil and gas sector, as well as significantly lower wages. China’s workforce policy is unlikely to be feasible in the long run, however, as its low-wage advantage is disappearing, according to Rystad.

“As China continues to work on stimulating its economy, Rystad Energy expects a renewed momentum for wage growth in the latter part of 2021,” Rystad said.

“From 2022 onwards, wages will increase even further, reinforcing our belief that employment levels in the country’s energy sector will struggle to recover to pre-Covid-19 levels in the coming years,” Rystad added.

Rystad’s analysis excluded contractors and part time workers. Countries examined in the analysis included Russia, Brazil, Norway, China, the UK, the US, Saudi Arabia, Nigeria, Canada, and Australia.

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