Contractor confidence within the UK Continental Shelf (UKCS) has risen with virtually half being extra assured about their prospects for the primary time since 2013, in response to an trade survey.
The findings of the 27th Oil and Gas survey, carried out by Aberdeen & Grampian Chamber of Commerce in partnership with the Fraser of Allander Institute and KPMG, reveal that 49% of contractors surveyed are extra optimistic about their actions within the present 12 months, up from 38% for the reason that spring survey.
The survey checked out work within the six months to October 2017, asking companies about their prospects within the 12 months forward in addition to the following Three-5 years as a way to assess developments in exploration and manufacturing, decommissioning, renewable and unconventional oil and gasoline extraction actions each within the UK and worldwide markets.
It discovered web stability of 39% proceed to anticipate an increase in optimism within the 12 months forward, with virtually half (48%) extra assured and solely 9% much less assured; whereas a web stability of 28% of companies are forecasting a rise within the worth of production-related work within the coming 12 months.
The share of contractors working at, or above, optimum ranges of their UKCS operations peaked at 79% in 2013 and has been declining steadily over the past three years to a low of 12% final 12 months. However the most recent outcomes present this has improved, with 27% of contractors now figuring out that they’re working at, or above, their optimum ranges within the UK.
The survey additionally signifies contractors’ expectations of higher involvement in decommissioning exercise over the medium time period with 83% reporting potential involvement within the subsequent three to 5 years. There additionally seems to be a firming up of opinions on unconventional oil and gasoline in comparison with earlier years, with 71% of operators/licensees not predicting any involvement within the UK in comparison with 40% final 12 months. The variety of companies anticipating to grow to be extra concerned in renewables has remained unchanged (54%).
The autumn survey additionally checked out employment and labour market points within the oil and gasoline sector. Less than 1 / 4 (23%, in comparison with 68% in 2016) of contractors decreased their employment in 2017, whereas virtually half (47%, in comparison with 24% in 2016) held employment steady. A complete of 30% (in comparison with solely eight% in 2016) elevated employment. Looking ahead, the survey suggests a continued optimistic outlook with a web stability of contractors (36%) anticipating an increase in employment throughout each everlasting and contract workers.
The proportion of companies reporting wage cuts additionally fell throughout 2017, from 43% within the earlier survey to 25%. While many have remained regular, the variety of contractors rising pay throughout the interval rose 10% total to 29%. The variety of vacancies additionally stays traditionally low, suggesting restricted prospects for main hiring within the sector, nonetheless each operators and contractors are forecasting a rise within the complete variety of staff going ahead.
Meanwhile, the pattern in expert employees leaving the trade continues though figures counsel it has eased marginally, right down to 38% from 43% on the similar time final 12 months.
Looking additional forward the sector is planning to diversify additional with 82% of enterprise presently being undertaken targeted on oil and gasoline, however with an expectation of this determine being 72% by 2025.
James Bream, analysis and coverage director at Aberdeen & Grampian Chamber of Commerce, mentioned: “The underlying information means that slightly than an trade with ‘cautious optimism’ we truly see an image of serious variety with some firms buoyant and performing effectively whereas others stay fragile. It does appear like the worst is prone to be over, at an mixture stage, with 60% of companies believing that the trade has already reached the underside of its present cycle and an extra 24% predicting it will occur throughout the subsequent 12 months. However as exercise ranges and income stay decrease for a lot of in comparison with three years in the past enterprise fashions for some could also be merely unsustainable.
“When requested what place…