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Oil & Gas UK Index Reflects Rising Business Confidence in Supply Chain
| Date: | 07 Jun 2010 | | Details: | The latest Oil & Gas UK Index published today (7 June 2010) reveals a clear increase in business confidence across the UK oil and gas industry, with the overall industry index rising by five points to reach 61 in the first quarter of 2010. This positive trend, following the six point increase in the previous quarter, indicates renewed optimism across the industry.
The index provides the overall measure of industry confidence on a 100 point scale, with a higher rating (above 50) indicating a positive outlook and a lower rating (below 50) giving a more negative standpoint.
Brian Kinkead, Oil & Gas UK's supply chain director, commented: "It is encouraging to see this continuous upward trend in business confidence, which is a clear indicator that our industry is emerging out of the recession with renewed drive, confidence and optimism. Overall, industry confidence is continuing to grow and in particular, in Q1 2010, we saw the highest rating given by all contractor segments since the survey began.
"When we first conducted our survey in early 2009, we saw a big gap in business confidence between exploration and production (E&P) and supply chain companies, the latter having been hit hardest by the low oil price and economic uncertainty. It is good to see that this gap is continuing to narrow. In Q3 2009, the supply chain index was still16 points lower than the E&P index, in Q4 2009 it was seven points lower and for the first quarter of 2010 it was six points behind."
In particular, there has been a big jump in confidence in the drilling and well services sector, up ten points from the previous quarter to reach an overall index of 60. Confidence in the facilities engineering, operations and maintenance sector is up four points, and also stands at 60; the marine and subsea sector is up five points to 59; and support services are up four points to 57.
Mr Kinkead continued: "The Q1 2010 results are encouraging but there is obviously still some degree of fragility within the industry. Despite the positive signs, the overall index of 61 suggests that although business confidence and activity are improving, the outlook is still not where it was some two to three years ago."
The key findings for Q1 of 2010 are:
The Oil & Gas UK Index for Q1 2010 measured 61, up five points from Q4 2009. The most significant rise was among supply chain companies whose confidence measured 59 compared with 54 in Q4 2009.
The rise in E&P companies' confidence is attributed to that of the independents, who measured 68 in Q1 2010 compared with 59 in Q4 2009.
At 65, confidence amongst E&P companies still appears to be more positive than businesses in the supply chain, yet the gap has narrowed considerably from 16 points in Q3 2009 to six points in Q1 2010.
The contractor segments all reported a rise in confidence in Q1 2010 over Q4 2009:
drilling and well services are up ten points at 60
facilities engineering and operations and maintenance are both up four points at 60
marine and subsea are up five points at 59
support services are up four points at 57
The full survey can be found here.
Ends | | Contact: | For further information, contact Sally Fraser on 020 7802 2404.
Notes to editors
The survey gauges the relative performance of the diverse sectors within the offshore industry against nine economic indicators to gain a better insight into the overall health of companies active on the UK continental shelf. Companies are surveyed at the end of each quarter to capture changes in investment, revenues and sales, operation and running costs, manpower and day rates, expenditure in research and development, employment and training as well as general business confidence and activity. Businesses canvassed include those in oil and gas exploration and production as well as suppliers in drilling and well services, facilities engineering, operations and maintenance, marine and subsea services and general support services.
Oil & Gas UK is the leading representative organisation for the UK offshore oil and gas industry. Its members, which number over 100, are companies licensed by the Government to explore for and produce oil and gas in UK waters and those who form any part of the industry's supply chain. |
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For all press enquiries please contact:
Trisha O'Reilly at Oil and Gas UK. Tel: 0207 802 2422 Email: toreilly@oilandgasuk.co.uk
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