Senior oil and gas professionals in the United States are among the world’s most confident about the outlook for the sector in 2019, as companies prepare for significant increases in capital expenditure (capex) over the coming months.
According to a new research published by DNV GL, 85% of sector leaders in the US are optimistic about the industry’s growth prospects in the year ahead, up sharply from 60% in 2018. This compares with three quarters (76%) reporting confidence among respondents globally.
Full of confidence, and buoyed by favourable government energy policies, the majority (71%) of senior oil and gas professionals in the US agree that more large, capital-intensive oil and gas projects will be approved this year than in 2018, revealed the research conducted by the technical advisor to the oil and gas industry.
These findings have been published in A test of resilience, DNV GL’s ninth annual benchmark study on the outlook for the oil and gas industry. The research is based on a global survey of nearly 800 senior oil and gas professionals, and in-depth interviews with industry leaders.
The US has the highest expectation of capex increases out of all countries and regions analysed in DNV GL’s study. 43% of respondents from the United States aim to increase capital spending in 2019, compared to just 23% a year ago. By contrast 30% of respondents globally expect to see a rise in capex this year. There are similarly optimistic findings for operating expenditure (opex), with the 31% predicting increased opex in the US outstripping both last year’s 20% tally and the 22% expectation level globally in 2019.
“Surging oil and gas industry confidence in the US is built on the foundation of improved financial resilience due to hard-earned cost efficiencies, cost discipline, best practice, collaboration, standardization and the continued recovery and stabilization of oil and gas prices for most of 2018,” said Frank Ketelaars, Regional Manager, the Americas, DNV GL - Oil & Gas.
“There are brighter prospects for activity and investment across the value chain this year and beyond. Deepwater projects are back on the agenda in the US after the sector has focused on reducing development costs while maintaining high safety levels. OPEC is among those predicting sustained growth in US unconventional oil production over the next few years. Additional LNG facilities will also start up or win approval in 2019 to support the country’s strong and growing role as an exporter of LNG. Rising availability of affordable natural gas and related liquids from unconventional plays is the basis for new investment in petrochemicals,” Ketelaars added.
As the oil and gas industry prepares to increase capital and operational spending, DNV GL’s research reveals that companies in the US also risk relaxing their tight grip on the cost efficiencies established during the recent market downturn.
AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week