Oil and gas companies in the UK are increasingly pessimistic about their business prospects, according to a new Business Sentiment Index.
The findings, from the fourth quarter of last year, were published by industry body Oil & Gas UK.
The report has shown that optimism in the sector is at its lowest since the index began in 2009.
However, progress in reducing costs has been reported with two thirds of respondents highlighting the intensive costs reduction and efficiency measures they are taking to keep their businesses competitive.
This includes reviews of internal practices, greater cooperation between client and supplier and the application of new technology to evolve smarter engineering solutions.
The index surveys representatives from both operator and contractor companies including small to medium enterprises on a quarterly basis.
The most recent score on the index was -31 on a -50/+50 scale.
Oonagh Werngren, Oil & Gas UK’s operations director, said: “The deteriorating market conditions and the scarcity of new business opportunities continue to be major concerns for the industry.
Many companies remain deeply apprehensive about the future, with two thirds reporting activity down further in the fourth quarter of 2015 compared to the previous quarter.
“For the majority of respondents, job losses continue, with 54 per cent of respondents reporting a reduction in headcount. Two thirds of respondents also reported falling revenues.”
“Taking a co-operative approach to implementing efficiency measures will help the UK oil and gas industry weather the current downturn and ensure it emerges in robust shape to tackle future economic challenges.
“However, both fiscal and regulatory reform also have a key role to play in transforming the UKCS into a competitive, low tax, high activity basin that will be attractive to a variety of operators and support the continued development of the sector’s world-class supply chain.”
