The decline seen in 2018 reflects the impacts of the prolonged downturn, as well as continued cost discipline and a focus on efficiency from exploration and production (E&P) companies. The 2019 forecast is based on an expected increase in expenditure on the UKCS this year. Some confidence is returning to the basin as improved cash flows, competitive market prices and a competitive fiscal regime have encouraged investors to increase budgets carefully. OGUK expects total expenditure to increase this year as similarly high levels of new project approvals proceed, and operational expenditure increases as many of the new fields approved in recent years come onstream. However, market conditions will continue to impact on investment decisions and therefore could continue to negatively impact industry activity.
Every £1 million spent by the UK oil and gas industry creates eight supply chain jobs and induces another eight jobs across the UK economy revealing the importance of stable and transparent market conditions. 6
6 Source: Experian
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