Losing Faith: Is There A Crisis Coming In UK Oil & Gas?
A recent survey from the Grampian Chamber of Commerce has shown concern amongst contracting companies at the parlous state of the oil and gas industry. Of particular concern was the news that over 60% of the operators approached by the survey had themselves cut projects due to tumbling oil prices.
Umbrella’s Jessica Evans offered these thoughts on the survey’s findings: “There is undoubtedly growing concern that oil prices have effectively shocked UK oil & gas. When you hear about the impacts on exploratory contracting – with something like 70% of respondents experiencing falls in project values – then you can get a view of how widespread the downturn has been.”
“The North Sea is a mature field, and that is making operations there ever more expensive, especially in exploration. Worryingly again is the news that over half of the survey respondents had been forced to cut staff training to save on costs.”
“Overall the falls in oil prices have shaken confidence, there’s no doubt. There’s less assuredness in the sector, and contractors’ are clearly feeling the pinch: only 7% of those surveyed could say they were looking forward to the year ahead, and that’s tough reading.”
“However, it’s chastening but not all doom and gloom. The recent Queen’s Speech will push the go-forward button for the exploitation of UK petroleum as part of the Infrastructure Bill.
“For existing contractors excellent rates of pay abound, and the skills shortage does mean that those contractors in work are benefitting from competitive rates. The UK’s Oil and Gas Industry has sailed through choppier waters than these, however the news is certainly sobering. ‘Crisis’ might be a worn term, but there are certainly some signs that rightly worry industry insiders and oil & gas employers.”