Industry confidence has risen again, according to a new report released Tuesday by oil and gas technical adviser DNV GL.
The company’s latest annual report, which surveyed almost 800 senior industry professionals and executives, revealed that overall industry confidence stood at 76 percent, compared to 63 percent last year, 32 percent in 2017 and 30 percent in 2016.
Seventy percent of senior oil and gas professionals are looking either to maintain or increase capital expenditure this year, according to the report. This is up from 66 percent in 2018 and 39 percent in 2017. More than a third (34 percent) expect to grow their workforce in 2019, compared to 20 percent last year and 10 percent four years ago.
DNV GL’s latest report also stated that companies “may be relaxing their tight grip on costs” in 2019. Twenty one percent of those surveyed said cost efficiency will be a ‘top priority’ in 2019, which marked a drop from 31 percent in 2018 and 41 percent in 2016.
“The global oil and gas industry is entering 2019 with renewed optimism and a greater sense of resilience,” Liv A. Hovem, CEO of DNV GL – Oil & Gas, said in a company statement.
“Despite greater oil price volatility in recent months, our research shows that the sector appears confident in its ability to better cope with market instability and long-term lower oil and gas prices. For the most part, industry leaders now appear to be positive that growth can be achieved after several difficult years,” Hovem added.
“While increasing optimism and expectations for higher spending are to be welcomed, there will also be new challenges for the sector this year. The industry’s resolve to maintain the efficiencies established during the recent market downturn will be tested as the sector relaxes its focus on cost control, and signs of supply chain inflation and skills shortages emerge,” Hovem continued.
Forty-one percent of survey respondents said they experienced cost inflation from their suppliers in 2018, rising to more than 50 percent in the Middle East and North Africa, and in Asia Pacific. Skill shortages ranked among the primary concerns of survey respondents as the top barriers to growth for 2019.
Research for DNV GL’s latest report was conducted during late October and early November 2018. Respondents were drawn from across the oil and gas value chain, including publicly-listed companies and privately-held firms. They represent a range of functions within the industry, from board-level executives to senior engineers.