The outlook for the oil and gas industry in 2018
Foreword: Liv A. Hovem, CEO DNV GL - Oil & Gas
Welcome to DNV GL’s Industry Outlook report. 'Confidence and Control: the outlook for the oil and gas industry in 2018’ is DNV GL’s eighth annual report providing a snapshot of industry confidence, priorities and concerns for the year ahead.
The insights in this report reflect what we are hearing from our customers all over the world, about the challenges they face and where they see potential. This provides us with foresight and I hope it will do the same for you.
This year, we see signs of green shoots; a new optimism is now emerging with confidence levels rising globally from 32% in 2017 to 63%.
In line with this confidence, senior oil and gas sector professionals expect a step change in the industry’s capex, opex and R&D spending levels in 2018.
After three years of cuts and freezes, more than a third (36%) of the 813 senior sector players we surveyed expect to increase spending on R&D and innovation in 2018: the highest level recorded in four years. There is recognition now that lack of investment has become a key barrier to growth among one in five respondents (19%).
These spending intentions come alongside a clear signal however that oil and gas industry costs will not return to pre-2014 norms.
Strict discipline will remain in the oil and gas industry, with half of respondents steadfast in their efforts to increase cost control measures in 2018, consistent with last year’s figures. Industry leaders plainly see the need to maintain a tight control over costs to support the leaner, smarter projects and operations that will be necessary to maintain margins in the years ahead.
The winners in our industry this year will be those who can continue to make a clear shift from an expansion mindset to a margin mindset, and recognize the importance of implementing new models and technologies to improve operational efficiency.
I wish you a successful 2018 and I hope this year’s report makes for encouraging reading.