37% of U.S.-based companies surveyed expect to hire new employees in 2019
Looking for a strong industry that is poised for growth and offers a secure, bright future ahead? There’s good news in the global petroleum—or oil and gas—industry. Senior oil and gas professionals in the United States are among the global experts who are confident about the outlook for the oil and gas industry in 2019. Companies across the country are preparing for significant increases in capital expenditure over the coming year. That’s according to DNV GL, a Denmark-based, internationally accredited registrar and classification society that provides risk management and quality assurance services to the maritime, oil and gas, and power and renewables industries.
Full of confidence and buoyed by favorable government energy policies, the majority of senior oil and gas professionals in the United States—71 percent—agree that more large, capital-intensive oil and gas projects will be approved this year than in 2018.
These findings have been published in A Test of Resilience, DNV GL’s ninth annual benchmark study on the outlook for the oil and gas industry. The research is based on a global survey of nearly 800 senior oil and gas professionals and in-depth interviews with industry leaders.
The United States has the highest expectation of capital expenditure increases out of all countries and regions analyzed in DNV GL’s study. As many as 43 percent of respondents from the United States aim to increase capital spending in 2019, compared to just 23 percent a year ago. By contrast, only 30 percent of respondents globally expect to see a rise in capital expenditures this year. There are similarly optimistic findings for operating expenditure, with the 31 percent predicting increased expenditures in the United States outstripping both last year’s 20 percent tally and the 22 percent expectation level globally in 2019.
“Surging oil and gas industry confidence in the United States is built on the foundation of improved financial resilience due to hard-earned cost efficiencies, cost discipline, best practice, collaboration, standardization and the continued recovery and stabilization of oil and gas prices for most of 2018,” said Frank Ketelaars, Regional Manager, the Americas, DNV GL–Oil & Gas.
As the oil and gas industry prepares to increase capital and operational spending, DNV GL’s research reveals that companies in the United States also risk relaxing their tight grip on the cost efficiencies established during the recent market downturn. The proportion of respondents whose organizations will assign top priority to cost efficiency this year has fallen from 35 percent in 2018 to 15 percent in 2019; the lowest globally. In turn, the old spending habits that affected the sector during the pre-2014 period of high oil prices may be returning. A whopping 42 percent of respondents in the United States believe that suppliers will drive notable price inflation this year.
And what does that mean for the industry? Good news—hiring will be on the rise. Senior oil and gas industry professionals report they are looking to recruit new talent this year: 37 percent of U.S.-based respondents expect to hire new employees in 2019, compared to just 20 percent in 2018. New DNV GL research shows that 85 percent of gas and oil industry leaders in the United States are optimistic about the industry’s growth prospects in the year ahead, up sharply from 60 percent in 2018. This compares with 76 percent reporting confidence among respondents globally.
Key Trends for 2019
- 85% of oil and gas industry leaders in the United States are optimistic about the industry’s growth prospects in the year ahead, compared to 60% going into 2018
- 71% expect more large, capital-intensive oil and gas projects to be approved this year than in 2018
- 42% believe suppliers will drive notable price increases this year
- 15% say cost efficiency is a top priority for their companies in 2019, compared to 35% in 2018