No doubt 2017 has been another challenging year for the sector.
However, 2017 may yet finish with a welcome Christmas present for the oil and gas industry.
A string of events, ranging from Opec extending their production cuts, a reduction in crude stocks around the world, better than expected demand growth to ongoing operational issues in the sector has increased the Brent oil price to $67 a barrel this week – the highest level since May 2015 and up almost 50% since mid-2017.
Combined with production efficiency up and costs down significantly in 2017, there is now a cautious optimism in the industry.
With many of the oil and gas producers returning to profit again and with over $8billion in merger and acquisition activity in the North Sea in 2017, there is likely to be renewed appetite for investment.
Early indications are that the industry is forecast to spend over £15billion on oil and gas related activities in 2018.
For an industry, which has been around for more than 50 years, this is something to cheer about!
Paul de Leeuw is director RGU’s Oil and Gas Institute
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