How depressing – price drop prompts oil and gas pessimism

Falling oil prices have really got under the skin of oil and gas explorers in the UK, suggests the latest mood test from an industry trade body. It’s the first […]

Register now!

By Vicky Ellis

Falling oil prices have really got under the skin of oil and gas explorers in the UK, suggests the latest mood test from an industry trade body.

It’s the first time Oil & Gas UK’s index has moved into “negative territory” since 2009.

A fall of nine points on the index – which goes between -50 to +50 – sees the mood at seven points below zero.

The “pessimism” picked up on in the Business Sentiment Index is also pinned on rising costs and a reduction in drilling.

Oonagh Werngren, Oil & Gas UK’s operations director said: “In recent months, the North Sea oil and gas industry has been considering the implications of a falling oil price which makes it harder to attract new investment. Many of our survey respondents expressed concern over future activity levels, which have not been helped by rising costs.”

Despite the falling optimism, last year’s capital investment reached £14.4 billion, the UK’s highest investment in three decades.