Investment in oil and gas sector expected to increase 250%
PwC survey finds 91% of industry expect oil prices to remain the same or increase
Almost nine in ten are optimistic about the level of undiscovered petroleum reserves in Ireland.
Investment in the Irish oil and gas sector is expected to increase almost 250 per cent over the next two year, according to a PwC survey.
The PwC Irish Oil and Gas Survey found that €502 million is expected to be invested in the sector by survey participants in the next two years, up from €300 million last year. However, investment is still well below the 2015 high of €1 billion.
Almost three quarters of players in the sector rate the overall outlook of the industry for the next two years as favourable, which is up significantly on 28 per cent last year.
Almost nine in ten are optimistic about the level of undiscovered petroleum reserves in Ireland, with 56 per cent of respondents expressing a high level of optimism.
The survey calls for a clear commitment from the Government to facilitate developments through changes to the planning and regulatory regime. Respondents felt the current regime was “not fit-for-purpose to enable large scale developments”.
Some 91 per cent of survey participants felt that oil prices will remain the same or increase in the next two years, although only 14 per cent expect an increase in prices of more than 15 per cent.
Ronan MacNioclais, PwC partner with its oil and gas practice, said the “significant and sustained fall” in the price of oil and gas in recent years has had a “dramatic impact” on the industry.
“As noted in prior years, Ireland is viewed internationally as a high risk location for investment in oil and gas exploration due to the lack of historic commercial discoveries,” he said.
“At times of low oil and gas prices, investors will invest in high return low risk locations, which unfortunately we are not. However the recent stabilisation in oil prices has clearly led to an increase in confidence among industry players.”
The survey was carried out during the summer amongst key players in the industry, including foreign and Irish headquartered entities carrying out petroleum production, exploration and services activities.