Oslo, 25 January 2018: Senior oil and gas professionals in Singapore expect a positive step change in the industry’s headcount and R&D spending levels in 2018, new research from DNV GL, the technical advisor to the oil and gas industry, shows. More than two thirds (70%) of respondents say their company will maintain or increase capital spending in 2018, compared to 26% last year.
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. It reveals an imminent turnaround in spending on R&D and innovation after three years of cuts and freezes. Four out of ten (41%) of the repondents from Singapore expect to increase spending on R&D and innovation in 2018 compared to 36% globally: the highest level recorded in four years.
“Those working in the oil and gas sector in Singapore are much more confident about the future and the outlook for 2018 than last year. We share this optimism and are encouraged to see a significant increase in R&D and innovation investment intentions. This will enable the industry to move forward, reduce inefficiencies and improve performance. Companies who have been able to diversify sufficiently will be very well positioned for the future,” said Brice Le Gallo, regional manager, South East Asia and Australia.
Increasing concerns regarding fluctuating oil price may explain a greater focus on cost efficiency for 41% of Singaporean respondents, up from 35% last year and higher than the global response of 31%. They are however, more optimistic of an oil price around USD$70 for the year ahead than globally (51% versus 38%).
Other key findings from DNV GL’s research include:
- Rising confidence is also evident in other regions. Europe has the most improved outlook for the oil and gas sector (up from 25% last year to 64%), with Latin America at 77% (46% in 2017) and North America (up from 49% to 57%)
- Nearly three quarters (73%) of senior industry professionals globally say their organization was somewhat or highly successful in achieving cost efficiency targets in 2017, compared to 65% in Singapore
- Nearly two-thirds (62%) of respondents globally expect their organization to maintain or increase headcount in 2018, compared to 52% in Singapore. This compares to 43% globally and 33% in Singapore in 2017
- 58% of respondents globally expect to maintain or increase operating expenditure in 2018, up 17 percentage points from 41% last year, compared to 43% in Singapore, up from 28% in 2017
- Although respondents in Singapore are still significantly more confident in both the sector and organization than in 2017, they are are less optimistic than global counterparts on investment increases in capex (5% versus 22%) and opex (5% versus 19%)
- Almost half (49%) of Singaporeans questioned stated that the greatest barrier to growth in the country’s oil and gas industry is uneconomic oil prices compared to 37% globally. Notably, twice as many oil and gas professionals in Singapore cited decreased demand for oil and gas as the second biggest barrier to growth (27% versus 12% globally).