The oil and gas sector is investing in innovation at its highest level for more than a decade, as the majority of firms forecasting rising profits in 2019, new research suggests.
In contrast to the wider UK economy, North Sea operators and contractors are bucking the trend and investing in staff, research and development (R&D), technology and new markets to support continued growth, according to the 30th Oil and Gas Survey.
The industry report revealed that the proportion of firms upping their R&D spending hit a high not seen since 2006/07.
Almost half (47 per cent) of contractors reported that they have either started to use artificial intelligence or will begin to do so in the next five years, while 45 per cent have increased investment in the UK Continental Shelf (UKCS) during the past 12 months.
Close to three-quarters (72 per cent) of companies forecast a rise in profits this year.
For the first time since the oil and gas sector downturn five years ago, confidence levels are consistently rising across licence holders, operators and the supply chain.
In particular, the share of contractors working at, or above, optimum levels in their UKCS operations is at 49 per cent, a five-year high.
Nine out of ten firms are now optimistic about the long-term future of the Aberdeen city region as an energy hub.
The survey, conducted by Aberdeen & Grampian Chamber of Commerce in partnership with the Fraser of Allander Institute and KPMG UK, found that 40 per cent of firms have increased their total workforce in the last year.
It also reported a net balance of 52 per cent expect to up their spend in staff training between now and 2021.
Shane Taylor, research and policy manager at Aberdeen & Grampian Chamber of Commerce, said: “Our survey paints a picture of an optimistic industry, investing to deliver the opportunity of a productive UKCS and a vibrant future for Aberdeen as an all energy hub. There’s an incredible opportunity for Aberdeen to leverage its reputation in oil and gas and lead the energy transition.”
He cited recent projects, such as the launch of the National Decommissioning Centre, as “powerful statements of intent” to become a global leader in the transition.
Moray Barber, partner at KPMG, added: “The report tells us that there has been investment pick up but we need to be cognisant of the fact that this is starting from a relatively low base from the challenging times the industry was facing four or five years ago.”