Industry Analysis & Industry Trends
For a number of years, declining reserves and falling production from the UK’s oil and gas fields have led to less oil and gas drilling, reducing demand for the industry’s services. UK sources of oil and natural gas are becoming scarcer, causing a drop in the exploration activity that the industry largely depends on. Falling oil prices since 2014 exacerbated the downturn in exploratory drilling. Overall, the maturity of North Sea oil reserves is a problem that is likely to damage the industry indefinitely.
Rigs operating on the UK continental shelf are involved in drilling exploration, appraisal and digging development wells. Although wells are drilled onshore, the main focus of drilling activity is offshore... purchase to read more
Industry Report - Industry Investment Chapter
The industry has medium level of capital intensity. For every £1.00 spent on capital in the industry, £4.02 is spent on wages. Activity relies heavily on a variety of equipment, including sophisticated offshore and onshore oil and gas drilling rigs, but much of this equipment is leased. It is often the exploration firms rather than contracted support companies that take on the expenditure. Nonetheless, support firms spend a great deal on keeping their technology up to date.
Those employed by the industry tend to be highly skilled. Positioning and operating drilling rigs, including offshore rigs of various types, requires considerable skill. Much of the industry's capital equipment is operated around the clock, which also adds to employment requirements.
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