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Interest in diversifying into shale gas is diminishing amongst oil and gas companies in the UK according to an annual survey of the sector commissioned by the Bank of Scotland.
It found that 31 per cent of the 141 business questioned were “extremely keen” to diversify into work involving onshore shale gas, down from 47 per cent the year before.
The larger companies – those with annual revenues of more than £750 million – were the most excited about fracking, with 52 per cent indicating a strong interest in moving into shale gas production. At 22 per cent, the figure was lowest for the smaller companies – those with revenues of less than £25 million.
The survey, conducted between December and January, also showed a diminished interest in diversification into renewables. A total of 31 per cent of companies said they were extremely keen on expanding into renewables, compared to 47 per cent last year. Whilst enthusiasm amongst smaller companies stayed level, it fell among medium and larger firms.
For the first time the survey asked companies whether they were interested in doing work in the utilities sector. More than a quarter (28 per cent) said they were extremely keen, with the greatest interest coming from medium size companies.
The report also documented the impact of the recent downturn in the sector due to the low price of oil, which is currently trading at around $50 per barrel of Brent crude after dropping below the $30 per barrel in January.
Of the companies surveyed 41 per cent said they had been “severely” or “quite badly” affected by the downturn, with 51 per cent saying they had cut jobs over the previous year.
Diversification was the most popular response to the question of where new opportunities would come from – 51 per cent of companies gave it as an answer.
Shale gas production in the UK should be economically viable if the flow rates at British wells can match those at wells in the US, the chief operating officer at IGas told Utility Week recently.
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