January 30, 2018 by EnergyNow Staff
Industry confidence has grown sharply in 2018, according to the new study by DNV GL, a technical consulting firm to the oil and gas sector.
DNV GL surveyed 813 senior oil and gas executives globally, they found that over 63% of professionals were confident about the rise & further growth in the industry for 2018. The percentage stood at only 32% just 12 months ago.
Europe had the largest growth from 25% last year to over 64%, with Latin America at 77% (compared to 46%) and Asia Pacific at 57%. Confidence in North America rose from 49% to 57%, not as drastic as the other oil & gas regions of the world.
A combination of two things have brought confidence back to the industry
The first, is oil and gas prices. Short-term prices seem to drive a lot of sentiment about longer-term perspectives for the industry – it’s always been like that. And second, costs have come down, both operating and investment costs.
The report highlighted that two thirds (66%) of these industry executives said their company will maintain or increase capital spending in 2018, compared to 39% last year. In addition, 62% of these energy executives expect their organization to maintain or increase headcount in 2018, compared to 43 percent in 2017.
Strict discipline is expected to remain in the oil and gas sector, with half of respondents suggesting they were steadfast in their efforts to increase cost control measures in 2018. This was consistent with 2017 (51%). Close to two-thirds believe that these are permanent changes, mirroring the results from last year’s survey (63 percent).
The research indicates that the oil and gas industry is becoming more confident that its successful focus on cutting costs and building new efficiencies into the value chain will last. A new optimism is now emerging, driven from a common understanding that cost levels are under control and operators can make reasonable margins from an oil price that is expected to stay lower for much longer.
The winners in the oil & gas industry this year are those who can continue to make a clear shift from an expansion mindset to a margin mindset, and recognize the importance of implementing new models and technologies to improve operational efficiency.