Norwegian risk consultant group finds sentiment for only a modest recovery for the global energy sector, though North America stands out. File photo by A.J. Sisco/UPI | License Photo
Jan. 26 (UPI) -- Confidence in the oil and gas sector has improved only modestly when compared with last year, though North America is a standout, an industry report finds.
DNV GL, a Norwegian company providing risk management advice, said the oil and gas professionals that took part in its survey said they were at least somewhat more optimistic about the sector than they were last year.
Elisabeth Torstad, the oil and gas division CEO, said the industry is expected to continue investing for the future, but at a slower pace than last year. The number of respondents who said they were anticipating stable or improved capital expenditures this year dropped from 43 percent to 39 percent.
"Despite the drawn-out recovery, investments are still being planned across the value chain," she said. "In 2017 we will see broadening of business portfolios and consolidations for growth as a way of reorganizing for the future."
Energy companies starting in late 2014 started trimming payrolls and expenses in response to plummeting crude oil prices, which hit historic lows early last year. Crude oil prices have stabilized at around $50 per barrel, though that's still off about 50 percent from the peaks of three years ago.
Steady crude oil prices and a U.S. shale sector that's proven more resilient than expected have offered a lifeline for the industry. Those companies out early with fourth quarter earnings reports said 2017 will be a year of optimism.
"We see 2017 as the start of an exciting new chapter," John Hess, the CEO of the company that bears his name, said this week.
DNV GL found some pessimism lingering across the global energy sector, though nearly two-thirds of business leaders expressed confidence about a North American recovery this year. That compares with the Middle East and North Africa, where slightly less than half expressed higher confidence.
On crude oil prices, the survey of 723 participants found crude oil prices will average $57.80 per barrel this year. The price for Brent crude oil was around $56 per barrel early Thursday.