Confidence in the outlook for Asia Pacific’s oil and gas industry has more than doubled in the past two years, according to new research published by DNV GL, the technical advisor to the oil and gas industry.
According to a new research from DNV GL, three quarters (76%) of senior oil and gas professionals in Asia Pacific are optimistic about the industry’s growth in 2019, compared with 58% in 2018 and 30% in 2017. The proportion of industry leaders who are confident in their own organizations’ prospects has also risen from 59% last year to 74% in 2019.
These rises in confidence come alongside intentions to spend more in the year ahead. A third (34%) of industry leaders in the region expect to increase capital expenditure in 2019, up from just 20% in 2018. More than a quarter (28%) anticipate their companies increasing operational expenditure, compared with 20% last year.
These findings come as DNV GL publishes A test of resilience, the company’s ninth annual report on the outlook for the oil and gas industry. The research provides a snapshot of sector confidence, priorities and concerns for the year ahead. It is based on a global survey of nearly 800 senior oil and gas professionals and in-depth interviews with sector leaders.
Recruitment in Asia Pacific’s oil and gas industry is also expected to rise in 2019, as more than two thirds of respondents to DNV GL’s research agree that more, large, capital intensive projects will be approved compared to last year. 29% of senior oil and gas professionals in the region say they will increase headcount in their organizations this year, up from 19% in 2018 and 10% in 2017. More than half (51%) expect greater use of contractors this year, compared with 39% globally.
“Increasing expectations for capital spending and recruitment in Asia Pacific are welcome news for the oil and gas supply chain. It has had to adapt after new developments were put on ice within the region and across the world during the market downturn, reducing demand for services, assets and equipment from Asia Pacific’s manufacturers and service providers. Despite fluctuations in the oil price at the end of 2018, the industry is entering 2019 with a greater sense of resilience to volatile market conditions,” said Brice Le Gallo, Regional Manager, South East Asia & Australia, DNV GL - Oil & Gas.
After a challenging few years, Asia Pacific’s oil and gas industry appears to be closing the chapter on a string of challenging years. Final investment decisions are now appearing, or are soon expected to appear, for several major projects around the region. These include Chevron’s approval of a multi-billion dollar second phase of the Gorgon LNG project in Australia in April 2018, and Sinopec’s plan to build new infrastructure to double its LNG receiving capacity in China over the next six years.
