OGUK survey reflects gloomier oil industry outlook

Oil & Gas UK says companies are “increasingly pessimistic” about their business prospects. OGUK’s Business Sentiment Index (BSI) for fourth-quarter 2015 indicated that optimism was at its lowest since the index began in 2009.

With a score of -32 on a -50/+50 scale, the index was in negative territory for the sixth quarter in a row (OGJ Online, July 31, 2015). The index surveys representatives from operator and contractor companies.

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

“For the majority of respondents, job losses continue, with 54% of respondents reporting a reduction in headcount,” Werngren said.

Two thirds of respondents noted “intensive” cost reduction and efficiency measures to keep their businesses competitive.

Werngren said fiscal and regulatory reforms “also have a key role to play in transforming the UKCS into a competitive, low tax, high activity basin.”

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