Business confidence in Britain’s offshore oil and gas industry supply chain remains fragile, it was reported yesterday.
Oil and Gas UK has just launched its first quarterly business confidence index.
This shows that, while there are signs of recovery in certain parts of the industry, business confidence in the supply chain remains delicate, with some way to go before it is fully restored to levels last seen 18 months ago.
Oil and gas production companies are more positive about the economic outlook than at the beginning of the year, it says, but the marine, subsea, drilling and well- service sectors in particular are still experiencing the impact of the economic downturn on their activity and business revenue.
OGUK operations and supply-chain director Paul Dymond said: “Although we have seen a marginal improvement in business confidence towards the year end as the oil price lifted from $33 per barrel in January to the current prices in the $70s, the overall ranking of 50 points at the end of quarter three suggests that business confidence in the upstream sector still remains fragile.”
Malcolm Webb, the organisation’s chief executive, said: “In these challenging economic times, it is important that the UK focuses on the health of the key sectors of its economy which can act as a barometer for recovery.
“The new oil and gas UK index will aid this by providing a better insight into the health of the offshore oil and gas sector and tracking how each of its diverse segments of activity is performing. The surveys will continue to be published on a quarterly basis and over time it is hoped this new index will become a useful forecasting tool for the sector. Oil and Gas UK remains very keen to work alongside government to help restore business confidence within our industry for the future. This vital industry is one of the UK and Scotland’s most important employers, taxpayers and wealth creators.
“It can help lead our country out of recession and it is vital that it receives the backing and encouragement from government through the tax and regulatory regime to enable it to do so.”
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