Wednesday 12 June 2013

UK Oil and Gas Industry Confidence Remains Stable

Business confidence in the UK oil and gas industry remained positive in the first quarter of this year,  unchanged from the last quarter of 2012, according to Oil & Gas UK’s business confidence index published today (12 June).  The index remained at 60 on a 100 point scale index, indicating that the industry is continuing to adopt a generally optimistic outlook.

Oonagh Werngren, Oil & Gas UK’s operations director, said: “Both operators and contractors have indicated continuing confidence in future activity, although the survey shows optimism among contractors is higher than the operators.  This suggests that the contractors are benefiting from the record investment in the UK continental shelf which has led to increased demand for their services and equipment. Many contractor companies also report that they intend to increase training and research and development spend to underpin the increasing activity they are supporting.

“The industry is also aware that the consistently strong activity is increasing pressure on the existing skilled labour resource and operators and contractors alike have pointed to concerns regarding manpower shortages and rising dayrates as factors which may hinder business growth.” 

The key findings of the survey for the first quarter of 2013 are:

•        Overall the Oil & Gas UK index remained static at 60

•        The operators’ index fell by four points from 57 to 53

•        The index for major operators fell by eight points, from 64 to 56, but still remained very positive

•        The index for independent operators fell by three points, from 55 to 52

The contractors’ index rose by three points, from 61 to 64 with all four subsectors remaining within the 60s range:

·         Drilling and well services fell from 61 to 60 points

·         Facilities Engineering, Operations and Maintenance rose by 3 points from 61 to 64

·         Marine and Subsea increased by one point from 61 to 62

·         Support services (includes logistics, transportation, HSE equipment, training, finance, insurance, legal and catering) rose 3 points from 64 to 67.

 The full Oil & Gas UK Business Confidence Index report is here.

The contribution made by major contractor and supply chain companies to the oil and gas industry is also covered in the annual review of the UK oilfield services industry produced by Ernst & Young. For more information click here .