A recent report, conducted by B2B International on behalf of Barclays, has highlighted the optimism surrounding the United Kingdom Continental Shelf (UKCS) and in particular the future of the oil and gas industry in the North Sea.
Currently, activity in the North Sea is thriving, with investment at its highest for 30 years and global energy demand continuing to rise. This report sheds light on the future of North Sea oil and gas, and the future certainly looks bright.
Growth and Investment in UKCS
- 64% of companies surveyed reported that their capital expenditure budget is expected to increase over the next two years, with only 1% predicting a decrease
- Over the next five years 71% of companies predict an increase, and over the next ten years, 66% of companies predict an increase in their capital expenditure budget
- 44% reported that oil price is a key consideration in future expenditure decisions
- 46% reported that they saw the UKCS as the area of greatest potential in driving future growth
- 75% of companies surveyed believed that foreign investment would have a positive impact on the industry, while only 1% felt it would have a negative impact
- Skilled labour shortage (66% of those surveyed)
- Lack of R+D investment (13% of those surveyed)
- Lack of governmental support (6% of those surveyed)
Reasons to be optimistic
- High investment and expenditure
- Increasing global energy demand
- R+D to maximise reserves from aging reservoirs
- Lack of viable alternatives in the future
Causes for concern
- On-going skills shortage
- Aging infrastructure
- Challenges of decommissioning
- Rising wage demands and operating costs
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