| Category: Industry Posted: Thu, Sep 22nd 2016 at 9:41 AM The two-year downturn in the oil and gas industry may be coming to a close. An annual survey released by Deloitte, “2016 Oil and Gas Industry Survey: Optimism Emerges in the Aftermath of a Long Downturn,” shows more than half (59%) of oil and gas professionals believe the recovery already has begun or will begin in 2017. While the current state of the market still leaves cost-containment initiatives a priority for oil and gas companies, executives nonetheless showed renewed confidence in an industry recovery. Executives pointed to expectations of rising prices, a return to increasing capital expenditures and headcount as drivers of their optimistic outlook. “This recovery in many ways mimics the pattern of the recovery from the Great Recession,” said John England, vice chairman, Deloitte LLP and US and Americas oil and gas leader. “If last year was the year of hard decisions, 2017 will be the slow road back. Companies are generally optimistic that prices will rise to a more sustainable level next year; however, they understand that even if we see an uptick in price, the industry likely won’t fully recover until 2018 or beyond.” Deloitte’s survey reveals that from upstream to downstream, most respondents expect to see an increase in capital expenditures next year. In fact, the upstream sector, which took the hardest hit in this downturn, is the most optimistic about a recovery, followed by the midstream sector. The study also reveals a number of trends in opinion that offer insight into the direction the industry may be headed: US$60/bbl is a key threshold Most executives believe that US$60/bbl is an important threshold for a revival in US oil and gas exploration and production activity.
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