The value of exploration and production activity across the UK Continental Shelf (UKCS) continues to rise with firms also now equally optimistic about the North Sea and international markets for the first time since 2013.
The findings of the 28th Oil and Gas survey, conducted by Aberdeen & Grampian Chamber of Commerce in partnership with the Fraser of Allander Institute and KPMG, reveal that while firms have in recent years looked to international markets for business growth, confidence is returning to the UKCS in terms of its potential future prosperity.
The industry survey shows that overall almost two thirds (64%) of contractors are more confident about doing business than they were a year ago with only 8% indicating that they are less confident.
And around seven in 10 contractors (71%) expect the upward momentum to continue.
Contractors are also reporting a more positive outlook around production-related work in the UKCS with 41% working at or above optimum levels in the UKCS.
The survey looked at work in the six months to March 2018, asking firms about their prospects in the year ahead as well as the next three to five years in order to assess trends in exploration and production, decommissioning and other related oil and gas extraction activities both in the UK and international markets.
Moray Barber, partner at KPMG, said: “I think the survey is very much a look forward into the future. What doesn’t come out though is there is still a lot of stress in the sector. If you are in the Subsea sector or as an SME you will find the market quite challenging.
“What the survey is telling us is that we have probably taken our pain and there is a lot of good things happening and to come in the future.
“It feels tangibly different now to how it felt two years ago. The tone of conversation we have with clients is that they can see light at the end of the tunnel. A couple of years ago it was a dark place and noone quite knew what the future held.”
Russell Borthwick, chief executive of Aberdeen & Grampian Chamber of Commerce, said: “It does appear that a corner has been turned but we must avoid complacency.
The future strength of the sector depends on operators, contractors and suppliers continuing to work together in the new way as the climate continues to improve. A steady recovery, not a return to boom and bust is what is required. What is clear is that oil and gas will remain a key contributor to the Scottish and UK economies for many years to come.”