Well services contractors operating in UK waters reported strong demand for their services according to figures in the 2014 Oil & Gas UK Well Services Contractors Report published today (May 20). Supporting the UK offshore oil and gas industry across the full cycle of well operations, the sector reported gross revenue of $3.2 billion (£2.06 billion), the highest level of capital investment since 2008 and provided employment for more than 15,000 people.
Oonagh Werngren, Oil & Gas UK’s operations director, said:
“The report reveals that despite declining exploration activity, well services contractors continue to provide significant levels of investment, revenue and jobs to the UK offshore oil and gas industry.
“The sector has increased gross revenue by 45.5 per cent since 2010 despite a marginal decrease in 2013, and comprises an important proportion of the £35 billion ($54.7 billion) supply chain outlined in the UK upstream oil and gas supply chain reports published by Oil & Gas UK and EY earlier this year.
“It is clear that well services contractors are committed to addressing both the challenges and opportunities of the UK Continental Shelf (UKCS) with total capital investment in equipment and technology to develop future capacity rising by 9.7 per cent to $212 million (£136 million) in 2013.
“The resilience of the sector in the face of declining exploration has much to do with the breadth of services it provides across the life cycle of well operations including drilling, completion, testing and maintenance. Respondents to the survey reported strong demand for remediation, redevelopment and intervention support for existing wells.”
Employment levels have remained consistently high with more than 15,300 people employed by the sector in 2013 despite the sector citing a shortage of skilled personnel and high attrition (staff turnover). A particularly encouraging statistic is the continued increase in the recruitment of apprentices, which demonstrates the sector’s commitment to developing new employees.
Looking ahead, factors such as high operating costs and the shortage of skilled personnel are expected to dampen optimism in the sector in 2014 although well services contractors have expressed confidence in the future. This reflects the high levels of activity on the UKCS and the belief that the Wood Review will result in operational improvements across the basin helping to stimulate an increase in the current low level of exploration activity.
To access the report, please click here.