Oil & Gas UK’s report on the UK oil and gas well services sector, published yesterday, shows that in 2011 the gross revenue generated from UK oil and gas business grew dramatically by 28 per cent to $2.8 billion (£1.7 billion). The number of highly-skilled jobs supported by the sector across the UK also rose by ten per cent to 13,000, including 2,000 graduate engineers and 1,500 technicians.
Alongside the increase in gross revenue and employment, the sector’s UK earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 23 per cent to $437 million (£273 million) in 2011. Investment in future capacity also increased by 20 per cent to $178 million (£111 million), half of which was in capital equipment, the other half in new technology.
Ken Cruickshank, Oil & Gas UK’s supply chain manager, said: “The UK’s oil and gas supply chain is a force to be reckoned with, supporting thousands of highly-skilled British jobs and the development of technology and expertise across the country. This latest report illustrates how the £57 billion wave of spending on UK oil and gas projects in 2011-13 that was highlighted in our Activity Survey is boosting activity and jobs in the well services business. The sector’s robust performance in a difficult economic climate across the UK is impressive.”
Step Change in Safety, the Industry Mutual Hold Harmless Agreement, Oil & Gas UK, PILOT Share Fair and the Supply Chain Code of Practice were cited by respondents as initiatives which are effective in encouraging safety and efficient business.
In 2012, gross revenue is forecast to rise by 6 per cent and EBITDA by 30 per cent. However, equipment shortages, reluctance among clients to trial new technologies and challenges in recruiting, training and retaining skilled personnel whose experience and expertise, honed in the UK, is in increasing demand in the lucrative global market, were raised as challenges of future growth.
Mr Cruickshank concluded: “With strong spending on UK oil and gas projects forecast to continue, the well services sector has the potential to grow even further and of course, we are yet to see the effects of the measures announced in the 2012 Budget to stimulate investment in UK oil and gas projects. Oil & Gas UK will work with its members to ensure the challenges of growth are addressed so that the well services sector can maximise its contribution to British employment and technology.”
Source: Oil & Gas UK, May 10, 2012