Oil and gas industry survey '˜most negative yet' analysts warn

The latest oil and gas survey is the “most negative” yet, according to a partner at its sponsors, law firm Bond Dickinson.

The report also found three-quarters of North Sea oil and gas contractors are “less confident” about their prospects than they were a year ago. However, confidence levels have marginally improved from their record low in November.

Operators surveyed reported a 15% fall in UK staff in the past 12 months and expect a further 17% of staff to lose their jobs this year - almost triple the 6% predicted six months ago.

For contractors, the 12 months to March 2016 saw a 13% reported weighted average reduction in their UK-based headcount.

About one in four companies (24%) said their top priority is cutting costs while 42% cited increasing efficiency and productivity as their main concern.

The joint survey by Aberdeen & Grampian Chamber of Commerce and the Fraser of Allander Institute found 14% of contractors reported working at or above optimum levels in the UK Continental Shelf (UKCS) compared to 79% three years ago.

The level of demand, commodity price and economic climate are cited as the top factors limiting activity in the North Sea and 42% of firms expect to reduce investment in the next two years, while 12% plan to increase it.

One projected area of growth is decommissioning, with 85% of contractors expecting to increase their involvement in this sector in the next three to five years - up from 79% six months ago.