UK Oilfield Services Sector Outlook 'More Positive'
After years of declining turnover, the outlook for the UK oilfield services sector (OFS) is more positive in 2018, according to a new report from EY published Wednesday.
EY’s Review of the UK Oilfield Services Industry highlighted that the UK OFS sector reported a decline in turnover for the second consecutive year in 2016, from $49.5 billion (GBP 35.7 billion) in 2015 to $41.9 billion (GBP 30.2 billion), with reductions across each of the supply chain categories (facilities, marine and subsea, reservoirs, support and services and wells).
Figures for 2017 are also expected to show a decline but 2018 looks ‘more positive as pressure from external factors ease’, according to the report.
“The industry is entering a more positive environment where oil price is rising and production is increasing as a result of both improved efficiencies and new fields coming on line, but this cannot give license for old habits to creep back in,” Derek Leith, EY partner and head of oil and gas tax, said in a statement sent to Rigzone.
“Long term success for the UK oilfield services sector will rely not only on the continued application of greater efficiencies but an active commitment to a sustainable future for the industry,” he added.
The report also emphasized that the need for UK OFS companies to diversify their operations by sector or geographically through exports will become ‘ever more pressing’.
“UK OFS companies cannot rely on growth in the UK alone to increase revenues and must both internationalize and diversify their operations to ensure long term survival,” Leith stated.
The report showed that exports accounted for 41 percent of turnover from UK OFS companies in 2016, up slightly from 40 percent in 2015 but down considerably from the 48 percent figure seen in 2010.
“While it is encouraging to see a rise in export activity it is concerning that access in overseas markets is still very modest,” Leith said.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- UK Oil Regulator Publishes New Emissions Reduction Plan
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- PetroChina Posts Higher Annual Profit on Higher Production
- McDermott Settles Reficar Dispute
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- USA Commercial Crude Oil Inventories Increase
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Oil Demand Outpaces Expectations, Testing Calculus on Peak Crude
- House Passes Protecting American Energy Production Act
- TotalEnergies Restarts Production in Denmark's Biggest Gas Field
- USA Oil and Gas Job Figures Jump
- Republican Lawmakers Say IEA Has Abandoned Energy Security Mission
- Blockchain Demands Attention in Oil and Gas
- Houthis Warn Saudi Arabia of Retaliation If It Backs USA Attacks
- Macquarie Sees USA Oil Production Exiting 2024 at 14MM Barrels Per Day
- Summer Pump Prices Set to Hit $4 a Gallon Just as Americans Hit the Road
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Equinor Makes Discovery in North Sea
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension