Oil & Gas UK Sees 3Q Rise in E&P Sector Optimism
Oil & Gas UK’s quarterly business confidence index published on Nov. 16 reveals that the business outlook in the UK upstream oil and gas industry for the third quarter continued to remain positive.
Exploration and production (E&P) companies, led by the independents in particular, showed increased optimism, with business confidence rising from 58 to 61 between the second and third quarters of 2010. While still remaining positive overall, supply chain companies registered a ten point drop in confidence from 65 to 55 points. This resulted in an overall fall for the upstream sector from 62 to 57 points.
The index provides the overall measure of industry confidence on a 100 point scale, with a higher rating (above 50) indicating a positive outlook and a lower rating (below 50) giving a more negative standpoint. This latest survey covered the three months to the end of September.
Brian Kinkead, Oil & Gas UK’s supply chain director, commented: “It is important to note that while we continue to see quarter on quarter adjustments, the overall index remains in positive territory. This mood was reflected in the results gathered from a ‘snapshot’ survey of participants attending the PILOT Share Fair 12 in early November, where 96 per cent of respondents felt the same or greater optimism about their business in 2011 compared to 2010.
“The micro-survey also showed a more positive year for employment in the supply chain, with 90 per cent of respondents saying that employee numbers in their organisation have either risen or remained static over the last year. It will be interesting to see how the Q4 results compare with the Q3 survey once the industry has had more time to digest the outcome of the 26th licensing round.”
The Oil & Gas UK overall industry index for the third quarter of 2010 measured 57, down five points from 62 points reported in Q2-10. The supply chain has seen a ten point reduction in confidence from 65 to 55.
E&P companies have registered a three point increase of in their index from 58 to 61. The majors index remained at 58 points in both the second quarter and third quarter of 2010. A steady rise in optimism was recorded by the independents whose index moved up from 58 in 10 to 62 points in third quarter of 2010.
All the contractor segments exhibited a fall in business confidence from second quarter of 2010 to third quarter of 2010, although remaining well above the 50 point mark. Oil & Gas UK reported that drilling and well services fell by 12 points from 70 to 58, after the ten point rise recorded between the first quarter and second quarter of 2010; marine and subsea dropped from 68 to 59 points over the quarter; facilities engineering and operations and maintenance fell by five points from 61 to 56; and support services dropped by six points from 61 to 55