Optimism in UK’s offshore oil and gas industry falling

7 August 2014

Optimism in the UK's offshore oil and gas is declining, statistics show. The Oil & Gas UK Business Sentiment Index for the second quarter of 2014 revealed that a recent drop of four points as part of a general downward trend had left positive feeling about the industry teetering at just two points above zero on a -50 to +50 scale.

Published in August, the index uses a number of economic indicators, including, revenue, investment and employment, to calculate a score where anything over zero is considered positive and anything under counts as negative.

Oil & Gas UK's operations manager Ken Cruickshank argued that while feelings about the industry were yet to dip into actual negativity, decreasing optimism was not an issue that the industry could afford to ignore.
"Incentives are required to encourage further investment in the basin to turn around low levels of drilling as the reduction in activity levels is adversely affecting the outlook of contractor, service and companies in the wider supply chain."

"While capital expenditure last year was at all-time high, our costs continue to rise and production rates continue to fall," he added. "We hope that the implementation of the Wood Review - in particular the creation of the Oil and Gas Authority and the establishment of a simpler, more competitive fiscal regime with a lighter tax burden through the HM Treasury's consultation - will be the catalysts which turn this situation around."

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