Grant Allan (Fraser of Allander Institute and Department of Economics) presented the results of the 22nd Oil and Gas survey to industry leaders in Aberdeen on June 12.
The latest survey finds that two-thirds of operators cancelled projects as a result of the fall in the oil price, and that both operators and contractors reduced staff training as pressure on budgets intensified. Contractors' net confidence in their current activity in the North Sea was at its lowest since the survey began in 2004. Only one in five firms are working at or above optimum levels in the North Sea, while there was more positive news for firms involved in decommissioning activity as the province matures. Overall, investment intentions remain weak, with only 20% of firms planning increases in investment in the next two years.
The latest survey also examined constraints on business activity, with many citing the challenging economic outlook for the sector, and an unwelcome increase in issues regarding the cost and access to capital. The survey also explored the sectors view on the changes announced in March’s UK Budget, and what should be the priority of the recently established Oil and Gas Authority.
Running since 2004, the Oil and Gas Survey provides a detailed snapshot and trend data for optimism and activity across operators and contractors in this critical sector of the Scottish and UK economies. The survey is carried out by the Fraser of Allander Institute twice a year, and is run in collaboration with Aberdeen and Grampian Chamber of Commerce, and with sponsorship from Bond Dickinson. Download results from the latest survey.