Offshore staff
LONDON -- Oil & Gas UK claims there has been a sharp drop in confidence throughout the UK upstream oil and gas industry in the first quarter of 2011.
The association’s quarterly business index says this reflects the impact of the recent increase in supplementary tax from 20% -30% which the UK government imposed on North Sea oil production.
A report published by Aberdeen University suggested that the tax rise could reduce UK oil and gas investment by up to £30 billion and production by up to a quarter over the next three decades.
Oil & Gas UK’s index measures industry confidence on a 100-point scale, with a rating above 50 indicating a positive outlook, and a figure below 50 giving a more negative picture.
For exploration and production companies, the 25-point decrease from 71 to 46 represents the lowest index so far recorded for the sector. Major oil companies registered a drop of 21 points from 60 in Q4 2010 to 39 in Q1 2011, while the index for independent operators fell in the same period from 75 to 48.
Across the UK’s supply chain community, optimism dropped from 61 to 54, with respondents now looking to growing their businesses outside the UK. Only support services, including providers of HSE equipment, consultancy, legal and training, retained a stable confidence rating.
05/04/2011
