The confidence of Britain’s oil and gas industry is steadily increasing according to Oil & Gas UK’s business confidence index published today.
An analysis of data gathered in February reveals that the sector has moved further into positive territory with a score of 60 points on a 100 point scale index.
While the confidence of operators has remained steady but unchanged since the last quarter at 57 points, it is the contractors who are driving the gradual rise in optimism, with their score having risen three points since Q3 2012.
Oonagh Werngren, Oil & Gas UK’s operations director said: “The rising confidence within the contractor sector suggests that the tax changes introduced by the Government last year to incentivise investment in the UK continental shelf are now bearing fruit.
"With operators investing around £11.4 billion in 2012, supply chain companies which perform essential functions supplying parts and specialist services and equipment to the operators are experiencing increasing demand for their services.”
Confidence in the marine and subsea sector is rising most significantly closely followed by facilities engineering, operations and maintenance.
Within the operator community it is the majors who are most optimistic while independents reported a two point fall in confidence. This suggests that the majors have the resources to make the most of the favourable business environment created by the tax changes last year while smaller companies are finding access to finance and resources such as drilling rigs are factors constraining their growth.
Werngren continued: “The challenge of recruiting and retaining skilled staff, while also accommodating increasing operation costs, emerges as a recurrent theme in feedback from the majority of companies surveyed for the index and suggests that this is exerting a steadying influence on the rising wave of optimism in the industry.”
The key findings of the survey for the fourth quarter of 2012 are:
• Overall the Oil & Gas UK index measured 60, an increase of two points from Q3.
• The operators’ outlook remained unchanged at 57: the majors increased by six points from 58 to 64 while the independents reported a two point drop from 57 to 55.
• The confidence of the contractor sector increased by three points from 58 to 61 with all four subsectors within the 60s range on the index:
o Drilling and well services remained at 61 points
o Facilities Engineering, Operations and Maintenance rose by two points from 59 to 61
o Marine and Subsea increase seven points from 54 to 61
o Support services (includes logistics, transportation, HSE equipment, training, finance, insurance, legal and catering) rose two points from 62 to 64.