Commenting on OPEC’s decision to cut production, Tom Faichnie, partner at RSM in Aberdeen, said:
‘The move from OPEC to cut production will be welcome news to the sector. However, we are unlikely to feel the impact in the service sector immediately, as budgets have already been set and orders for high value longer lead products will have been placed already. This means we are likely to experience higher petrol prices at the pump before we see the benefit of increased activity in the North Sea.
‘An increasing trend of oil price, or at least maintaining at a higher level, is needed before we see the impact, so we could be waiting until 2018 at the earliest to feel the benefits. The tough times will therefore continue in the short term, and key initiatives, such as diversification of products and services and geographical expansion, are still needed to ensure UK companies are well positioned to service the industry, and maximise the uplift when it arrives.’