UK offshore confidence low following activity decline

Offshore staff

LONDONBritain’s oil and gas industry is becoming more pessimistic about business prospects, according to Oil & Gas UK’s latest Business Sentiment Index.

The 4Q 2015 report found that optimism is at its lowest since the index began canvassing views from operators, contractors, and SMEs in 2009.

Oonagh Werngren, the association’s operations director, said: “The deteriorating market conditions and the scarcity of new business opportunities continue to be major concerns for the industry.

“Many companies remain deeply apprehensive about the future, with two-thirds reporting activity down further in the fourth quarter of 2015 compared to the previous quarter.

“For the majority of respondents, job losses continue, with 54% of respondents reporting a reduction in headcount. Two-thirds of respondents also reported falling revenues.”

On a more positive note, two-thirds of respondents also reported progress in reducing costs, following efficiency measures including reviews of internal practices, greater cooperation between clients and suppliers, and application of new technology to evolve smarter engineering solutions.

Werngren said: “Taking a co-operative approach to implementing efficiency measures will help the UK oil and gas industry weather the current downturn and ensure it emerges in robust shape to tackle future economic challenges.

“However, both fiscal and regulatory reforms also have a key role to play in transforming the UKCS into a competitive, low tax, high activity basin that will be attractive to a variety of operators and support the continued development of the sector’s world-class supply chain.”

02/10/2016

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