Oil and Gas Industry set for continued recovery in 2019

December 2018

After several years of falling activity and expenditure by the oil and gas Industry, with corresponding pressures and difficulties for the Offshore Support and Marine sectors, key research and analysis now predicts a period of optimism and growth for the industry.

In an extract of a survey published online by Offshore Energy Today, 70 percent of senior industry professionals interviewed expected to increase or maintain capital expenditure in 2019.


 

Liv A. Hovem, CEO of DNV GL – Oil & Gas, said:

“The global oil and gas industry is entering 2019 with renewed optimism and a greater sense of resilience. For the most part, industry leaders now appear to be positive that growth can be achieved after several difficult years.

The industry’s resolve to maintain the efficiencies established during the recent market downturn will be tested as the sector relaxes its focus on cost control, and signs of supply chain inflation and skills shortages emerge.” Source

DNV GL said that its research shows signs that old spending habits which affected the sector during the pre-2014 period of high oil prices could be returning.

In a separate study, the Norwegian oil and gas intelligence firm Rystad Energy predicted that offshore spending will outgrow spending on onshore shale activities in 2019, with offshore subsea service companies set to benefit from it.

The offshore service market will also feel the effects of the recent oil price slide, according to Rystad, but this sector is nevertheless projected to grow by 4% this year.

 

Rystad’s head of oilfield services research Audun Martinsen said:

“Many would expect offshore spending to be cut as drastically as shale, but offshore budgets were at a ten-year low last year, after four years of intense cost focus, and from that level you don’t need much additional activity or inflation to drive up the market.” Source

The findings from these surveys certainly support our own experience and analysis of market conditions at present.  With a flourishing order book and negotiations under way to secure several more long term charters,  we are optimistic that the offshore sector will continue to grow and we are well placed to benefit from the business that it generates.

 

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