Two-thirds of North Sea oil and gas industry operators have been forced to cancel projects because of the recent fall in oil price.
That is the stark finding in a report from the 22nd Oil and Gas Survey, conducted by Aberdeen & Grampian Chamber of Commerce in partnership with law firm Bond Dickinson.
It concluded that plunging oil prices have reduced confidence levels to an ‘all time low’ for companies that serve the oil and gas sector, some of which are Sheffield-based.
The report said contractors’ confidence in the UK Continental Shelf (UKCS) is at its lowest point since the survey began in 2004.
Only seven per cent of contractors are more confident about their UKCS activities than they were a year ago, compared to 76 per cent who are less confident.
The percentage of firms that report working at or above optimum levels in the UKCS has also fallen to its lowest level since the survey began ten years ago.
Just one in five contractors, 21 per cent, is working at or above optimum levels, down from 47 per cent in the previous survey.
James Bream, research and policy director at Aberdeen & Grampian Chamber of Commerce, said: “Confidence levels are at an all-time low and we are now experiencing our first ‘recession of confidence’, and it looks gloomy in the year ahead too. However, we have seen positive tax changes, the Oil and Gas Authority team is bedding in and in the Queen’s Speech the new UK Government has committed to legislating for the Infrastructure Bill (This will provide a 3.9billion boost to the economy).”