Industry body Oil & Gas UK said yesterday that business confidence had improved in the UK oil and gas sector but the overall picture remained fragile.
It reported after publishing the latest quarterly Oil & Gas UK Index that the sector, hit by low oil and gas prices and a freeze on access to capital in the earlier part of 2009, was emerging from the recession with more optimism than at any point in the past 12 months.
The overall improvement in confidence has been driven by increased activity across the oil and gas supply chain, with the well services, drilling and the marine and subsea sectors showing the most positive change compared with previous quarters, according to Oil & Gas UK.
However, it said that although business confidence and activity was improving the outlook for the upstream sector was still fragile.
Brian Kinkead, Oil & Gas UK’s recently-appointed supply chain director, said: “In the first three quarters we saw a clear gap in confidence levels between the exploration and production (E&P) companies and the industry’s supply chain, with the supply chain lower than exploration and production.
“In the fourth quarter, this gap significantly narrowed.
“The increase in optimism within the entire upstream sector suggests that investment opportunities are being considered by E&P companies, which is filtering through to increased activity and optimism within the supply chain.
“This improvement is welcome, but we still have some way to go to rebuild business confidence to the levels of a few years ago.”