Subsea engineering firms enjoy oil price boost

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CONFIDENCE has increased in the key subsea engineering sector but the mood remains fragile, industry leaders have said.

Trade body Subsea UK said the findings of a survey of members completed in late November indicated that conditions had improved since July, amid signs some are reducing their reliance on the hard-pressed oil and gas sector.

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Some 63 per cent of respondents to the latest survey said they felt fairly optimistic about the next six to twelve months, compared to 56% in July last year. Four out of five respondents, 80%, said they had no plans to make people redundant in the near future, up from 73% in July.

The outlook for the oil and gas sector improved in November. Oil prices recovered some of the ground lost after the coronavirus crisis sent them plunging earlier in the year.

Hope that vaccines would soon be made widely available boosted sentiment.

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Subsea UK said: “While oil and gas is still the dominant market … activity in offshore wind has increased and 28% of firms are now prioritising this market, compared to 21% in July.”

Chief executive Neil Gordon said that despite the more positive mood the sector remains fragile. Citing factors such as low margins, he also noted many firms were still servicing debts incurred as a result of the last oil and gas downturn.

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