A business confidence index published by Oil & Gas UK says the nation’s upstream oil and gas industry is maintaining a stable and positive outlook for the second quarter of 2012.
The overall index rose by one point from 64 to 65 on a 100 point scale, the highest since the series began almost four years ago.
This rise in confidence was driven by the operators while the outlook of contractors, who raised concerns regarding manpower, cost inflation and tightening margins, remains unchanged.
Survey results include a three point rise from 57 in the first quarter (Q1) of 2012 to 60 for major operators, while a two point increase has been noted in independent companies in the second quarter of 2012.
The contractor sector saw a rise in facilities engineering, operations and maintenance, which rose three points from 63 to 66 and the marine and subsea sub sector stood at 67 points.
A drop in drilling and well services was noted with 64 compared to 70 in Q1, while support services fell from 67 to 65.
The report notes that overall confidence of the contractor sector stood at the same level as Q1.
David Ripley, Oil & Gas UK supply chain director, said the general confidence level is encouraging; however it remains similar to the last quarter with activity remaining high.
"Operators are busy with a number of major projects, including several sanctioned last year, and appear buoyed by the tax changes aiming to promote investment that were announced following constructive dialogue between the government and industry," said Ripley.
"Contractors continue to enjoy high activity levels fulfilling existing contract commitments in the UK as well as expanding the export of their services and products to clients around the globe.
"They have, however, become increasingly aware of the challenge of sourcing skilled personnel and equipment, for example drilling rigs, in a tight market, with operating and manpower costs rising and margins being squeezed."
Image: David Ripley is the supply chain director for Oil & Gas UK. Photo courtesy of: Oil & Gas UK.