Confidence in the outlook for the UK oil and gas sector has increased almost fourfold in two years, an industry survey found.
About two-thirds (68%) of companies plan to increase or maintain capital expenditure in 2019 – more than double 2017’s figure of 33% – according to an outlook report by DNV GL.
The risk assessment firm, a technical adviser to the industry, said the proportion who expect to raise or sustain operating expenditure has grown from 37% in 2017 to 72% for 2019.
A third of companies anticipate stricter cost efficiency to take hold this year, compared with 53% in 2018.
About two-fifths (41%) said they experienced price inflation from suppliers in 2018 while 44% expect suppliers to drive price inflation in 2019.
The significant boost in expectations for spending are welcome signs
Skills shortages and/or an ageing workforce was the most cited barrier to growth.
Overall, 71% of UK firms were confident about the outlook for 2019, compared with 18% in 2017.
Oslo-based DNV GL surveyed 791 senior industry professionals from October to November last year.
Hari Vamadevan, oil and gas regional manager for the UK and west Africa, said: “The significant boost in expectations for spending are welcome signs of an industry that is, for the most part, prepared to close the chapter on a string of challenging years.
“However, this also brings new challenges for the sector in 2019, the hard-earned cost efficiencies developed over the downturn could be put to the test as we see early signs of cost inflation returning to the industry.”
Almost half (48%) of those surveyed expect to grow their workforce in 2019, compared with just 10% four years ago.
Business opportunities and competitive advantage topped the list of factors most likely to drive oil and gas companies to decarbonise operations in 2019.
More than a third (35%) said they were looking to increase investment in renewable energy this year.