Since oil prices plunged last year to below $30 a barrel for the first time in over a decade, producers have taken center stage, first with record losses and job cuts, and then, with the green shoots of the recovery, new market listings and a string of asset sales.
Meanwhile the engineering companies which keep the North Sea machine running have been the forgotten casualties of the oil price crash. However, in recent weeks Wood Group’s £2.2bn takeover of Amec Foster Wheeler has shone a light on the rig-operators and maintenance crews of the oil field services sector.
The 2014 oil crash hit the sector hard, causing a contraction of over 12%. Ernst and Young (EY) says overall annual turnover fell for the first time since its review started in 2008, from £40.6bn in 2014 to £35.7bn in 2015. In 2016 the sector shrunk another 26%.
EY partner Derek Leith says: “It has been a very difficult trading environment, with the huge pressure on costs and lots of job losses,” and the year ahead will be a struggle too.