That’s according to Aberdeen & Grampian Chamber of Commerce’s (AGCC) 32nd oil and gas survey, which outlined reduced activity levels, project cancellations and workforce cuts as a result of the coronavirus pandemic as drivers for the development.

During the current survey period, the six months to October 2020, 78 percent of contractors were less confident about their activities, while one percent were more confident. The net balance of -76 percent showed that contractors’ confidence in their current UK Continental Shelf activity was down from the 46 percent recorded a year ago and has fallen below the ten years average net balance of 15 percent, AGCC highlighted.

Looking a year ahead, 58 percent of contractors expect the outlook to worsen and 14 percent are confident that the situation will improve, resulting in a net balance of -43 percent, according to the survey. Licensees and operators report similarly low confidence levels for both the current situation and looking to the year ahead, the survey shows.

The net balance reported for production related activity dropped from 43 percent in 2019 to -47 percent in the latest survey. When asked a year ago what contractors were expecting for 2020, a net balance of 46 percent had been anticipating an increase, however the results now indicate an expected decline over the next year.

When asked what measures firms had taken as a result of Covid-19, 37 percent of contractors reported temporarily reducing their operations with eight percent reporting temporarily ceasing all operations. Around a third (34 percent) reported postponing projects, while 23 percent had cancelled projects. When asked what firms had experienced as a result of Covid-19, 95 percent of contractors had been affected by postponed projects and 83 percent had seen projects being cancelled.

Approximately half of contractors surveyed reported a decline in their workforce, 22 percent of which reported reductions which equate to more than ten percent of their workforce. The extent of the current reductions to the total workforce is not as severe as the levels reported in the 2016 downturn, although around a fifth of surveyed firms said they expect to make further reductions in 2021.