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Review of the UK oilfield services industry

EY’s review of the UK oilfield services (OFS) industry analyses 2016’s trading information – turnover, growth, EBITDA and exports – of UK registered OFS companies in five subsectors: reservoirs; wells; facilities; marine & subsea; and support & services.
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Innovation

How do companies embed an innovation culture and challenge old ways of working?

Sustainability

How much of the significant cost savings are sustainable in the long term?

Consolidation

Time to expand or an opportunity to exit by investors?

Capital

How do companies resolve legacy issues and enable access to new capital?

Diversification

How high a priority is identifying and entering new markets?

UK oilfield services industry: back from the brink?

EY - Derek LeithDerek Leith
Partner,Tax

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'Cautious optimism' continues to dominate the oil and gas sector. The optimists have seen encouraging signs such as the oil price breaking through the $60 a barrel mark for the first time since 2015 and acquisitions of UK Continental Shelf (UKCS) assets by new entrants. Equally, there are reasons to temper this optimism with cost control remaining imperative, uncertainty on future commodity price remaining and; demand uncertainty with the speed of transition away from fossil fuels. The ball remains in the industry’s court to transform the UKCS, to innovate and collaborate to create value for all stakeholders.

EY - Oil drums

The UK OFS industry generated £30bn turnover in 2016 with more than 123,000 employees.

The operating costs per barrel in the UKCS have also fallen from $26.30 in 2013 to $14.70 in 2017, reflecting the efforts by operators and supply chain to reduce costs and find more efficient ways of operating.

Reservoirs

EY - Reservoirs

In 2016, the reservoirs supply chain comprised 3% of total UK upstream oil and gas supply chain turnover. Turnover decreased 32% between 2014 and 2016, export turnover accounted for 53% of 2016 total turnover and the sector employed over 4,000 employees.

Wells

EY - Riser

In 2016, the wells supply chain comprised 18% of total UK upstream oil and gas supply chain turnover. Turnover decreased 32% between 2014 and 2016, export turnover accounted for 47% of 2016 total turnover and the sector employed over 17,000 employees.

Facilities

EY - Oil Slots

In 2016, the Facilities supply chain comprised 32% of total UK upstream oil and gas supply chain turnover. Turnover decreased 26% between 2014 and 2016, export turnover accounted for 37% of 2016 total turnover and the sector employed over 56,000 employees.

Marine and subsea

EY - Marine and subsea

In 2016, the Marine and Subsea supply chain comprised 27% of total UK upstream oil and gas supply chain turnover. Turnover decreased 27% between 2014 and 2016, export turnover accounted for 49% of 2016 total turnover and the sector employed over 23,000 employees.

Support and services

EY - Support and services

In 2016, the Support and Services supply chain comprised 20% of total UK upstream oil and gas supply chain turnover. Turnover decreased 19% between 2014 and 2016, export turnover accounted for 29% of 2016 total turnover and the sector employed over 21,000 employees.

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