Investment is starting to flow back into the UK oil and gas industry as confidence levels soar after three tough years, a new report says.
The eight annual survey from DNV GL − technical advisor to the oil industry − also indicated the number of people who expect headcounts to rise has more than doubled compared to this time last year.
The poll shows 61% senior oil and gas professionals believe the energy sector is positioned for growth, compared to just 18% in 2017.
Hari Vamadevan, senior vice president, DNV GL – Oil and Gas, said increases in spending provided the clearest evidence that confidence has returned.
Almost no new projects were moving forward this time last year, Mr Vamadevan said.
Today the sector can look to several North Sea developments for signs positivity, including Shell’s plans for the Penguins field and Premier Oil’s Tolmount project.
Three years of cuts and freezes are also about to give way to a jump in spending on research and development and innovation.
More than a third of the 813 professionals who took part in the poll expect to increase spending in those areas in 2018 − the highest level recorded in four years.
The survey, which “takes the oil and gas industry’s temperature”, according to Mr Vamadevan, did suggest cost control remains a “critical issue”, despite signs investment is picking up.
More than 90% of UK respondents said they would either increase or maintain cost control measures already in place, reflecting the on-going need for industry to manage its spending better.
Twenty-eight percent expect company headcounts to rise in the year ahead, compared to 12% of respondents in 2017.
Another 28% think staffing levels will fall, a vast improvement on 52% last year.
Mr Vamadevan said he did not think oil and gas industry recruitment would be on a large scale.
He said companies would be hiring in specific areas − for new projects and for digitalisation and innovation.
He said: “It’s a good sign that industry is looking more long term again, but do not expect to see hiring in vast numbers.
“Even late last year, there was still consolidation in the industry with mergers and there were still job losses being announced before Christmas and even at the beginning of this year.
“So by no means is it back to plain sailing and happy days.”
The return of Brent crude to the $70 mark at the start of 2018 has given North Sea industry a lift, considering it dropped below $30 early in 2016.
But Mr Vamadevan said oil companies would not get carried away and that $70 was higher than most expected.
He added: “It’s important to remember that we are a long-term industry that takes its confidence from the short-term oil price.”
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