Buoyant Business Confidence

Oil & Gas UK’s quarterly business confidence index published recently reveals that the business outlook in the UK upstream oil and gas industry for the fourth quarter of 2010 has recorded the highest score since the survey began in December 2009.

The index for overall industry confidence for the last three months of 2010 measured 63 points which represents an increase of six points over the previous quarter. A confident ten point increase from 61 to 71 was recorded for Exploration and Production (E&P) companies, with independent operators leading this wave of optimism (up 13 points from 62 in Q3 to 75 in Q4). Across the supply chain, the level of business confidence rose by six points from 55 to 61.

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: “Overall the mood of the industry is optimistic with E&P as well as supply chain companies registering increased levels of confidence. This is the first time since the survey began that we have seen E&P companies in such a positive mood in terms of activity and investment. We expect this trend to be confirmed shortly with the release of Oil & Gas UK’s 2011 Activity Survey which forecasts exploration, investment and production of the UK’s oil and gas reserves.

The key findings for Q4 of 2010

• The Oil & Gas UK overall industry index measured 63, an increase f six points from 57 points on Q3. The supply chain registered a six point increase in confidence from 55 to 61
  
• E&P companies registered a ten point increase from 61 to 71. The major companies’ index rose from 58 points in Q3 to 60 in Q4. A significant surge in optimism was recorded by the independents those index jumped from 62 points in Q3 to 75 in Q4.
  
• All contractor segments experienced a boost in business confidence from Q3 to Q4 remaining well above the 50 point mark: Drilling and well services rose by four points from 58 to 62. Marine and subsea recorded a 14 point increase over the quarter from 59 to 73.

Facilities engineering, operations and maintenance increased by 8 points from 56 to 64.

Support services rose by two points from 55 to 57

The full survey can be found at: www.oilandgasuk.co.uk/publications/viewpub.cfm?frmPubID=395