The Aberdeen and Grampian Chamber of Commerce (AGCC) 24th Oil and Gas Survey has provided a boost to oil and gas contractors seeking work in the UK’s Continental Shelf (UKCS) in the North Sea, with news that there could be a rise in contractor demand over the long term. This is a result of firms increasing their involvement in decommissioning and renewable energy.
The overall outlook in the UKCS has remained somewhat negative, with there being a sustained headcount reduction by operators. Around 15% of operators’ workforces has been slashed in the past 12 months, with an estimated 17% reduction over the next year. This could be a positive for contractors, as hiring intentions are likely to rebound strongly when the sector recovers.
Industry experts have warned of a ‘brain drain’ if firms do not prioritise retaining and training their workforce. The report reads, “With the talent pool decreasing, and concerns over skills shortages mounting, contractors who decide to hang in there could eventually be considered vital components in ensuring the UK oil and gas sector retains its functionality.”
With a larger number of firms utilising the revenue that can be generated from decommissioning, contractors are advised to look towards this area for new contracts. The Oil and Gas UK’s Activity Survey 2016 estimates that around 80 oil and gas fields will have ceased production by 2021, as well as there being the removal of 144 platforms between 2019-2026.
Despite the negative outlook in the UKCS, confidence is higher in the non-UKCS markets. This is causing firms to take action to secure opportunities in the likes of Mexico and Iran. This provides the option for contractors to continue in conventional oil and gas work until the North Sea begins to recover.
