From Aberdeen (IF): The strength of the oil industry has insulated Aberdeen from much of the economic woes which have hit other parts of the UK, but a big wave of belt-tightening has now begun here.

BP is the latest big player in Europe’s oil capital to launch a cost-reduction exercise brought on by rising costs and toughening market conditions.

Service companies as well as operators want to trim expenditure and jobs are already going at various firms across the Granite City. The pace of job losses could increase if the oil price falls further. This could have a major impact on the local housebuilding industry, which has been very buoyant in recent years.

New offices have also been springing up all around Aberdeen, but there could now be a large oversupply if the oil price situation worsens.

In its latest Scottish property review, Ryden reports that the office market in Aberdeen has turned and it has seen a relatively poor six months of take-up.

‘The recent high level of activity in Aberdeen will be curtailed by lower oil pricing and we are likely to see a quieter period ahead in the short term,’ the company has reported.

But Ryden says the medium to long-term prospects are still positive.

The firm is more upbeat about the Aberdeen industrial premises market, however, reporting strong demand.

From the Editor: The British Chamber of Commerce has called on the government to take the issue of energy security more seriously including having a more focussed interest in the oil and gas sector.

The BCC called on the Chancellor of the Exchequer George Osborne to reduce the tax rate for the sector in order to increase business confidence and give offshore licencees the view that they can get a good return on their investment.

Meanwhile, Oil & Gas UK has announced two projects aimed at stimulating exploration in the UK North Sea.

The first is a government funded study of all Central North Sea in the last decade. This area is deemed the most prospective in the sector. This is also a British Geological Survey study of the Palaeozoic potential of the UKCS based on data from operators.

Offshore