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PPG - Contractors 24/8/01

PPG - Contractors 24/8/01. Preliminary Report AUPEC Survey WSCA. PPG - Contractors 24/8/01. 1. Over 5 years UK market has fallen from 5% to 3.9% of the global total 2. Slower recovery in earnings is indicative of pressure on margins. PPG - Contractors 24/8/01.

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PPG - Contractors 24/8/01

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  1. PPG - Contractors 24/8/01 Preliminary Report AUPEC Survey WSCA

  2. PPG - Contractors 24/8/01 1. Over 5 years UK market has fallen from 5% to 3.9% of the global total 2. Slower recovery in earnings is indicative of pressure on margins

  3. PPG - Contractors 24/8/01 1. Capital investment in 2000 is 54% of 1998 peak with little improvement for 2001 2. Globally, drop was to 61% but has recovered sharply

  4. PPG - Contractors 24/8/01 UK Ratio of NBV to GBV (8 WSCA members only) 60% 50% 40% 30% 20% 10% 0% 1996 1997 1998 1999 2000 2001 1. Decline in NBV/GBV from 57% in 1996 to 25% today is an alarming trend 2. The UK sector asset base is getting older (fully depleted within 2 to 3 years!)

  5. PPG - Contractors 24/8/01 1. Globally there was a modest 15% cutback in global spend. 2. However in the UK the drop was 42% and not recovering

  6. PPG - Contractors 24/8/01 1. Reduction in headcount recovering in 2001 as companies try and recruit 2. An increase from 27% to 32% of people based in the UK but working internationally

  7. PPG - Contractors 24/8/01 1. Sharp decline through 1998 to 2000 2. Recruitment started, but experience level decreased in UKCS

  8. PPG - Contractors 24/8/01 1. Resource flight - 15% to 20% 2. Continuing 3. Helped with efficiencies; limited “stretch” left in the system

  9. PPG - Contractors 24/8/01 • Closing points: • 1. Report will be factual, with no WSCA recommendations: • Financial performance of WSCA companies in the UKCS has suffered • Capital investment has dropped • Resource flight is proven • 2. Published mid September, a full report with many other interesting comments. • 3. WSCA will develop recommendations to coincide with release of report. • The UKCS followed the world during the downturn. Will it recover as before? • Resources can return but at this time the UKCS appears unattractive. • With the expected increased work program through the end of 2001, can the • well services sector meet expected demand?

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