Optimism growing among UK offshore contractors

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Offshore staff

ABERDEEN, UK – Around 45% of contractors have increased their investment in the UK continental shelf (UKCS) over the past 12 months, according to Aberdeen & Grampian Chamber of Commerce’s 30th Oil and Gas Survey.

Close to half (47%) have either started to use artificial intelligence or will do so in the next five years.

The survey, conducted in partnership with the Fraser of Allander Institute and KPMG UK, found that only 6% of companies view taxation as a limiting factor on the UK shelf, down from 26% in 2017.

Another conclusion was that 40% of firms had expanded their workforce over the past year, with 52% expecting to spend more on staff training between now and 2021.

As for prospects in the short term and over the next three to five years, the positivity identified in 2018 reports has softened but the industry remains confident about its future.

Optimism on the international oil and gas industry is 21% above the 10-year average, suggesting continued confidence in export opportunities. In the UKCS, 49% of companies are working at or above optimum levels, the highest since 2014.

Almost three quarters (72%) of firms are forecasting an increase in profits in 2019 and the results also recorded the highest figure in this survey’s history indicating a rise in the value of UKCS production-related activity.

Moray Barber, partner at KPMG, said: “It is positive to note that 35% of respondents say that funding and tax incentives influence their decisions to invest in R&D in the UK.

“The report tells us that there has been investment pick up, but we need to be cognisant of the fact that this is starting from a relatively low base from the challenging times the industry was facing four or five years ago.

“Around 20% of respondents have said that they don’t take advantage of the UK’s generous tax reliefs for qualifying R&D - our experience is that most oil and gas companies are undertaking some form of qualifying activity and so we as a sector need to keep reinforcing the message that these government backed incentives are there to be claimed and can add real value to your business.”

05/31/2019

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