Employment in the petroleum industry

In 2015, about 205 000 people in Norway were directly or indirectly employed in the petroleum sector, about 35 000 fewer than in 2014. This because of workforce reductions in response to lower activity in the industry, both in Norway and internationally.
In 2015, about 205 000 people in Norway were directly or indirectly employed in the petroleum sector, about 35 000 fewer than in 2014. This because of workforce reductions in response to lower activity in the industry, both in Norway and internationally.

After many years of strong growth, the number of people employed in the oil and gas industry and related industries dropped in 2015. It is difficult to provide a precise estimate of the number of people employed in the sector, because it is complicated to distinguish between deliveries of petroleum-related goods and services and deliveries to other industries in terms of labour input. It is even more complicated to estimate indirect employment, in other words employment generated in other parts of the economy by demand from the petroleum industry. Several different methods and approaches have been used to estimate employment figures, and estimates of employment in the oil and gas sector vary. Figures from three different studies are presented below.

Total employment in the petroleum sector in 2015 was about 205 000 people

Direct and indirect employment

Statistics Norway estimates that 205 000 people were directly or indirectly employed in the petroleum and petroleum-related industries in 2015, which is a drop of 15 % from 2014 to 2015. The 2015 figure corresponds to about 7,5 % of total employment in Norway.

Indirect employment is a result of demand from the petroleum industry for goods and services in a variety of sectors, including wholesale and retail trade, ICT equipment and services, temporary employment agency activities, renting of machinery and equipment, hotel and restaurant services and legal and accounting activities. The data collected by Statistics Norway at present do not permit a meaningful distinction between direct and indirect employment in the petroleum sector.

IRIS, the International Research Institute of Stavanger, has also published a survey of employment in the industry, which was commissioned by the Norwegian Oil and Gas Association. Their estimate is that a total of 330 000 people were directly or indirectly employed in the petroleum and petroleum-related industries in 2014, 186 000 of them directly and 144 000 indirectly. This is 90 000 higher than Statistics Norway’s estimate of total employment for the same year. One reason is that IRIS also includes employees involved in suppliers’ export activities and employment resulting from suppliers’ own investments. In March 2016, IRIS published updated figures for direct employment in 2015. The survey shows that the number of people directly employed by the oil and gas industry dropped by 22 000, largely because of workforce reductions in the petroleum-related supply industry.

The industry employs people in all parts of Norway

Ever since petroleum activities began on the Norwegian shelf, one of the authorities’ objectives has been to build up petroleum-related business activities, and Norway is now a world leader in a number of areas. Onshore petroleum activities in Norway are still concentrated in Rogaland county, but other parts of the country have become involved as offshore activities have expanded northwards. There are now strong knowledge clusters in the petroleum field and internationally competitive supplier companies in many places in Norway. According to IRIS, there were employees in petroleum-related industries in 415 of Norway’s 428 municipalities at the end of 2014.

Lower activity and weaker demand from the petroleum industry, both in Norway and internationally, has had major consequences for the supply industry. Cutting workforce size is one of several approaches being used to cut costs and adapt to a lower level of activity. The greatest effect on employment figures is in western and southern Norway, where a high proportion of value creation is related to the oil and gas industry.

The service and supply industry

The service and supply industry is represented throughout Norway. It employs most people in the Stavanger region, where there are companies offering a wide range of goods and services. In other parts of the country, there are often clusters of companies in the same segment within a limited geographical area.

In and around Oslo, there is well-established engineering expertise and a cluster of seismic companies. Trondheim has a strong position in research and education, while the Bergen region has become a centre for platform maintenance and subsea equipment. In Buskerud, especially in Kongsberg, a strong cluster has been developed related to subsea technology, automation and dynamic positioning equipment. In Southern Norway, there are world-leading companies in drilling technology, and the Ålesund region, has maritime companies that provide a complete shipbuilding and outfitting cluster, for example for advanced offshore vessels.

Direct employment – oil/gas companies and the supplier industry

A third study, carried out by the Centre for Applied Research at the Norwegian School of Economics for the Ministry of Petroleum and Energy, found that about 145 000 people were directly employed in the petroleum sector in 2015, about 28 000 in oil and gas companies and 117 000 people in service and supply companies. This is about 8000-9000 employees lower than the estimate in a similar study carried out in 2012. However, employment rose from 2012 to 2014, and did not drop until 2015. This is illustrated in the figure below, which is based on employment figures from the annual national accounts presented by Statistics Norway.

The figure shows how the number of people directly employed in the Norwegian petroleum sector has changed since petroleum activities began in the 1970s, based on figures from the national accounts. These figures do not include employees in companies that supply goods and services to other industries as well as the petroleum industry. This is the case for a large proportion of the supply industry, and explains the discrepancy between these figures and those found in the other studies. The figure shows that employment in the oil and gas industry was zero in 1970, and rose to 200 in 1972 and 65 000 in 2014. For the first time, there was a marked drop in the number of employees from 2014 to 2015.

Number of employees in the Norwegian petroleum sector, 1970-2016

Updated: 20.02.2017

Source: Statistics Norway - Annual national accounts (table 18)

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Number of employees in the Norwegian petroleum sector, 1970-2016
Updated: 20.02.2017