Companies delivering drilling, completion, testing and maintenance for oil and gas wells last year generated record gross revenue of £1.9 billion ($3.05 billion) in 2012, a survey by industry association Oil & Gas UK shows.
The sales figure, the highest since records began in 1996, reflects increasing activity on the UK Continental Shelf (UKCS). This has also led to a rise in the total number of technicians and graduate engineers employed by well services contractors rose to 2,200 and 1,700, respectively.
The sector continued to invest in future capacity with spending on equipment and technology rising by around five per cent from $178 million to $186 million. Technological innovation remained a priority for well services contractors, some of whom spent up to 90 per cent of their annual capital investment on developing new technologies.
The higher than expected rise in gross revenue could be attributed to a number of factors ranging from increased exploration and production activities since 2011 to the growing number of technically complex wells that require the specialist knowledge of well services contractors, said Oonagh Werngren, Oil & Gas UK’s operations director.
“The sector is, however, competing with other booming oil and gas provinces around the world with respondents reporting a 19% rise in the number of UK employees working overseas to deliver well services outside the UK," she noted. "Attracting, retaining and engaging skilled personnel here in the UK represents a challenge to the industry, one which is being addressed, together with Government, to ensure that this sector, alongside others, can continue to flourish.”
Well services providers forecast that gross revenue will rise by around 5% in 2013, but business growth may be hindered by continuing concerns regarding the limited supply of skilled personnel and the availability of equipment.