UK’s oil and gas industry is badly hit by prices slum

43% of firms are planning austerity measures and two fifths diversify their operations.

08.Jun.16 11:59 PM
By Vladimir Vasiliev
Photo Toinnov.com

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UK’s oil and gas industry is badly hit by prices slum

Though oil prices have a tendency to recover slowly, the industry’s business environment is entirely different now. Some of the industry CEOs suppose that oil prices could reach $75 per barrel of Brent crude in 2018 while more than a third of CEOs think that it could happen no sooner than 2020. In any case there is no time to wait and measures must be implemented today.

In this situation the industry shows quite remarkable resilience. At about quarter of firms tried to diversify and now have interests in other sectors and invested in new technology. At about 40% began to diversify production last year and now are going to continue. As a substitute some see renewables, in which interests rise.

Sure, the shock of slumping prices could not be overcome smoothly. Ambitions became lesser. 24% of firms postponed looking at international opportunities. More than a half had to cut costs or introduce efficiency measures. 42% of firms in England and Wales reduced their workforce. In Scotland even more than that – 63% of businesses had to cut jobs.

Maybe that is not the bottom yet, but what should and could be done is proceeding. Government too is trying to keep a close eye on the taxation level affecting the industry and takes actions needed to protect jobs.

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