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lily

Covid in Scotland: Oil and gas sector in economic turmoil, says report

Reported by lily | November 25th, 2020 @ 12:42 AM

Covid in Scotland: Oil and gas sector in economic turmoil, says report

The UK oil and gas sector is in "economic turmoil" amid the coronavirus pandemic with about a fifth of firms expecting more redundancies in 2021, according to a new report.

Aberdeen and Grampian Chamber of Commerce (AGCC) said reduced activity levels and project cancellations had seen business optimism "slashed".

Confidence is now said to be as low as during the industry downturn in 2015.

The findings came in the 32nd AGCC Oil and Gas Survey.

It covers the six months to October.

The survey was carried out in partnership with the Fraser of Allander Institute and KPMG UK.

It asked firms about the initial Covid impact, how they expected activity to recover, and further issues such as energy transition and Brexit.

The survey found that only 13% of contractors were working at, or above, optimum levels in the UK Continental Shelf (UKCS) compared with 47% a year ago - with 82% predicting a decrease in revenue in 2020.

A total of 23% of contractors reported cancelling projects as a result of the coronavirus outbreak, with a further 34% putting activities on hold.

More than three quarters of businesses - 78% - were less confident about activities going forward, while only 1% were more confident.

AGCC said that while businesses typically reported higher levels of optimism about their international activities, the latest results marked the lowest recorded levels of confidence in global markets in the history of the survey.

About half of contractors surveyed reported a decline in their workforce - 22% of which said reductions equated to more than 10% of their workforce - and about a fifth of surveyed firms said they expected to make further reductions in 2021.

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