BUSINESSES in the North Sea oil and gas industry remain cautious, according to a new report.
The claim was illustrated in industry body Oil and Gas UK’s latest business confidence index, which has shifted little over the past two quarters – dropping one point from 54 to 53.
The index measures a number of economic indicators, including changes in business confidence, activity levels, business revenue, investment and employment.
It gauges overall industry confidence on a 100-point scale, with a higher rating, above 50, indicating a positive outlook and a lower rating, below 50, representing a more negative viewpoint.
The organisation said incentives for investment would be required to restore industry confidence and maximise economic recovery of the UK’s oil and gas resource. It added a predictable tax regime had an important role to play.
Oil and Gas UK’s supply chain manager Ken Cruickshank said: “When we look more closely at the figures it is clear that there are only minor fluctuations in confidence levels, above and below 50 right across the industry.
“Overall, it is worth pointing out that the industry is only just in positive territory and that the mood is less optimistic than this time last year, when the industry registered 57 points.
“Operators generally appear more cautious than the contractors, suggesting that they are taking time to assess the full implications of the tax changes and the medium and long-term impact on future projects.”
Mr Cruickshank said the contractor sector tended to work within a more immediate timescale and has sustained a slightly more positive outlook in the mid-50s.
“This would suggest that the sector is continuing to win work from UK oil and gas developments where investment is already committed, or where the economics are sufficiently robust for these projects to go ahead,” he added.
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