North Sea oil and gas industry 'less optimistic'

Industry body Oil and Gas UK has published research indicating a decline in optimism among key players in the sector.

Their Business Sentiment Index showed optimism down from two points above zero, to seven points below zero.

The index is published quarterly and is described as a snapshot of the industry mood.

Rising costs, a reduction in drilling and the fall in oil prices were said to be factors behind the decline.

Oil and Gas UK operations director Oonagh Werngren said: "Over the last six quarters, there has been a marked trend towards declining optimism in the sector but this is the first time the overall index has moved into negative territory since 2009.

"In recent months, the North Sea oil and gas industry has been considering the implications of a falling oil price which makes it harder to attract new investment.

"Many of our survey respondents expressed concern over future activity levels, which have not been helped by rising costs."

She added: "The industry urgently awaits an announcement on the 28th Licensing Round, the appointment of the new chief executive officer of the Oil and Gas Authority and the outcome of the Treasury's fiscal review to ensure that the basin remains competitive on a global basis. Together, answers on these should help boost confidence in the UKCS."