UK's North Sea oil and gas sector sheds over 5,000 jobs

The year-long decline in oil prices has led to over 5,000 job loses in the  UK's North Sea oil and gas sector, the country's new Oil and Gas Authority (OGA) said on Monday.

North Sea oil companies had taken a severe hit from the near 55 per cent drop in Brent crude prices since June 2014, and they were also incurring some of the industry's highest operating costs in one of the world's most mature basins.

"Regrettably, this has led to the loss of around 5,500 jobs since late 2014," Andy Samuel, chief executive of the OGA, said in a report summarising the newly-created body's first months.

North Sea operators, including Shell, BP, Chevron and ConocoPhillips, had all cut workforce a trend that had raised a number of concerns about an emerging skills gap.

The OGA, established as an executive body five months ago, was tasked with helping North Sea operators squeeze the maximum oil and gas out of the basin.

The oil and gas sector counts a workforce of 375,000 and continued to be an important source of tax revenue, even as the receipts were falling.

UK oil production was down to the lowest since output started in the mid-1970s as old fields ran out of resources.

The report suggested unit operating costs had gone up more in the North Sea than in many other basins around the world, and oil producers had had to make job cuts, as also withdraw from their more costly projects.

The situation had led companies to ''make some tough decisions to reduce operating costs, improve efficiency and remain competitive", said Dr Andy Samuel, chief executive of the OGA said, cityam.com reported.

 The difficult conditions ''underlined the need for structural change in our industry'', he added.

''We should be in no doubt about the scale of the challenge ahead.''