UK oil and gas operators are on the cusp of dramatic transformation as the sector recovers from the impact of the coronavirus and positions itself for a low carbon future.
Of those contractors responding to a survey, 75% anticipate moving into renewables work over the coming three to five-year period, the highest level recorded since the question was first asked in 2015.
On average, they believe oil and gas will account for less than three quarters of their business activity by 2025 – down from the current average of 86%.
The 33rd Oil and Gas survey, conducted by Aberdeen & Grampian Chamber of Commerce’s Research Chamber in partnership with the Fraser of Allander Institute and KPMG UK, paints a picture of fragile optimism and strong leadership among businesses operating in the sector.
The findings, which cover the six months to April 2021, show contractor confidence in the UK Continental Shelf (UKCS) has significantly improved from a net balance of -76% reported six months ago to +6%.
This is a rise from the expected forecast reported six months ago where 58% of contractors expected the outlook to worsen.
When combined with almost half (49%) of contractors saying they plan to hire new talent in the coming year, the research shows that the industry remains resilient and proactive in embracing change.
The challenges faced over the past year are however reflected in the reduced level of reported activity in production and exploration work. The net balance reported for production related activity of -15% indicates a continued overall decline, although this has eased from the -47% reported in 2020.