Following the global collapse in oil prices, North Sea oil revenues have been in freefall. In the first three months of this year they fell by 75%, continuing the downward spiral from the middle of last year. The downturn seemed to have justified the fears expressed by No campaigners in the referendum on Scottish independence. Indeed, tax receipts from oil accruing to Scotland between January and March this year were £168m, down from the £742m gathered in the final quarter of 2014. And nowhere is the economic wind-chill factor being more sharply felt than in Aberdeen.
Amid job layoffs in a region long regarded as Scotland’s Klondike, the big oil operators are putting an end to the longstanding “two weeks on, three weeks off” working model for oil-rig workers. Crews are being pressured into signing up to a “three weeks on, three weeks off” equal-time rota. This is a tougher regime than in Norway, but is comparable with working practices in regions such as the Gulf of Mexico.
Aberdeen international airport show that passenger numbers in May took a hit of 8.1% against the same month last year. The occupancy rate for city hotels, meanwhile, was 68.9% in April, down from 77.9% in April 2014. More than 1,200 oil workers have been laid off in the region since the downturn began last year, while local businesses – minicab firms, hotels and restaurants – are reporting fewer customers. The property market, once seen as the most buoyant outside London, has begun to retreat, with worse expected.
But it is not all gloom.
Eclectic Fizz is the city’s premier champagne bar, as its manager explains “There’s still a lot of money in this place. You might ask yourself where it’s coming from, but it’s still there and it’s still evident. Of course, the falling oil prices have had an adverse effect, but that’s happened all over the world. If this is what it’s like when money is supposed to be scarce, I’d love to see this place when the good times roll.”
Sales of Moët, the house champagne, remain healthy, he says, while prosecco and cava are still sold in high numbers for those who want as close an approximation of the high life as they can get.