Further losses for KCA Deutag amid ‘slow recovery’

KCA Deutag chief executive Norrie McKay
KCA Deutag chief executive Norrie McKay

KCA Deutag posted another set of losses in for the nine months to the end of September amid a “slow recovery” and pricing levels being under pressure.

The Aberdeen-headquartered offshore contractor posted a pre-tax loss of £90.3million for the year to date, following a £92.6m loss in the same period in 2017.

The offshore services business was “robust”, with revenues of £308.9m, however that is still down from £315.9m last year.

North Sea operations were stronger than the previous quarter, which KCA said reflected lower personnel and maintenance costs, as well as lower non-productive time and improved incentive bonus achievements.

Its rig design subsidiary RDS reported that activity continues at lower levels, however it is seeing increased opportunities for new work.

Chief executive Norrie McKay said: “In October Brent oil prices reached their highest since 2014, reaching 85 dollars per barrel but have since fallen back to below 70 dollars per barrel showing the volatility in the market.

“In the International market, despite some increases in activity, there continues to be an excess of service company capacity causing continued pressure on pricing.

“As a result, the recovery remains slow, particularly in our Land Drilling business, and we do not anticipate that this will change until investment increases and utilisation levels strengthen.

“We do believe that the current investment levels will eventually drive a requirement for oil majors to increase recoverable reserves but we would anticipate that this may take some time to fully work its way through the International markets.”