According to the latest Rigzone survey, UK oil and gas professionals appear to lack confidence that the Chancellor’s announcement in the pre-Election Budget of a new round of tax initiatives will be successful in stimulating investment into North Sea exploration. Of the 963 UK oil and gas professionals who participated in the survey, only 17% feel the range of tax initiatives will be enough to stimulate meaningful investment in North Sea exploration over the next five years, with 45% of those working in Scotland and 44% working elsewhere in the UK reckoning they will not.
A further 38% of UK respondents were undecided on the point. In fact, the majority (65%) of UK respondents believe oil price stability holds the key to unlocking commercialisation of Britain’s offshore reserves in the coming years, not government policy. This sentiment also holds true for respondents working in Scotland / the North Sea, where sixty-seven percent echoed this point of view.
While uncertain about the likelihood of their own government policies generating investment opportunities for North Sea oil exploration, the overwhelming majority of those working in the UK oil & gas sector are supportive of Norway’s fiscal policy on exploration. Seventy-eight percent of total UK survey respondents – including 79% in Scotland and 74% in the rest of the UK – believe the UK should follow Norway’s practices, where production taxes have historically been as high as the UK but where companies can claim back up to 78% of exploration spending.
However, on the question of whether the UK should introduce a Norwegian-style wealth fund off its oil production taxes, respondents are less in sync, with 44% favouring implementation of a similarly-styled wealth fund and 41% indicating they feel it’s too late to introduce such a system. In Scotland, sentiments were evenly split with 44% of respondents in favour of implementing such a fund and a similar number indicating that they believe it is too late to introduce such a system. Turning to respondents’ own prospects in the oil & gas industry, nearly three quarters (71%) of UK respondents say they are considering looking for work outside the UK.
For those presently working in Scotland / the North Sea, the primary reason for considering such a move is lack of job security, whereas those elsewhere in Britain feel that better career opportunities exist in the oil & gas industry outside of the UK. More than half (52%) of respondents currently working in the oil and gas industry in Scotland / the North Sea indicated sagging confidence in their career prospects in the region over the next five years, with nearly a quarter (24%) of those professionals responding that they are not at all confident and another 28% describing their confidence levels as “below middling.”
Mark Guest, International Managing Director of Rigzone commented: “Oil and gas professionals are highly mobile. If assurances cannot be given by the industry about the mid-to long-term career opportunities in the UK’s off-shore market, our survey indicates that many professionals may simply look for work elsewhere. This could exacerbate recruitment issues in the sector at a time when the industry has already highlighted a shortage of engineering students graduating from British universities.”
About the Survey From March 19, 2015 to March 26, 2015, Rigzone and OilCareers* surveyed professionals working in the UK oil and gas sector. 963 responded to the survey, with 59% working in Scotland/the North Sea and 21% working in the rest of the UK.