The latest oil and gas survey is the “most negative” yet, according to a partner at its sponsors, law firm Bond Dickinson.
The report found three-quarters of North Sea oil and gas contractors are “less confident” about their prospects than they were a year ago. However, confidence levels have marginally improved from their record low in November.
Firms surveyed reported a 15 per cent fall in UK staff in the past 12 months and expected a further 17 per cent of staff to lose their jobs this year –almost triple the 6 per cent predicted six months ago.About one in four firms said their top priority is cutting costs while 42 per cent plumped for increasing efficiency and productivity.
The joint survey by Aberdeen & Grampian Chamber of Commerce and the Fraser of Allander Institute found 14 per cent of contractors reported working at or above optimum levels in the UK Continental Shelf (UKCS) compared to 79 per cent three years ago.
The level of demand, commodity price and economic climate are cited as the top factors limiting activity in the North Sea; 42 per cent of firms expect to reduce investment in the next two years, while 12 per cent plan to increase it.
One projected area of growth is decommissioning, with 85 per cent of contractors expecting to increase their involvement in this sector in the next three to five years – up from 79 per cent six months ago.
On the EU referendum, 45 per cent of respondents said it was difficult to reach a clear view on whether a Brexit vote would be positive for the industry; 20 per cent said it would make little difference.
Uisdean Vass of Bond Dickinson said: “Six months ago I described the 23rd Oil and Gas Survey as the most negative we had experienced. Unfortunately this, the 24th survey, has surpassed it.”