2019 industry review and our expectations for 2020

As we start a new decade, we caught up with Precise founder Peter Thompson and find out what he’s made of the last 12 months, what to look forward to in 2020 and what you can do to ensure you’re ready for it.

“It’s fair to say 2019’s been an odd year – we expected it to be busy and, to a point, it has but we’ve really seen the impact of global issues across the board and how that’s held back business. So I think as we come to the end of 2019, everyone in the industry feels like it could have been better.

“It does of course compare to two real bumper years in 2017 and 2018, and the campaigns that drove them. Those life cycles came to their natural end but, because of macro-economic conditions, weren’t replaced. Everyone I speak to is saying the same thing: Brexit, trade wars and the like are fuelling chronic indecision across the globe, so project-decisions are being delayed.

“What has been interesting is that we’re seeing new companies in the O&G industry pop up and they’ve done pretty well. It contrasts with how some of the more established companies are faring, whether it’s because they’re introducing disruptive approaches and establishing different business model. It will be fascinating to see how they go in year two or year three and whether, as they become more established, they’ll be affected by macro-conditions in the same way as the ones who’ve been around for longer.

“Saying that, the O&G sector is ripe for disruption. There is still a colossal amount of pressure to keep costs down and reduce spend – the companies don’t know what’s happening to the oil price so they’re understandably cautious about costs. Those who can make a difference will be popular.

“There are numerous initiatives from companies like Shell, trying to push forward disruptive technologies like unmanned survey vehicles and increasing remote operation of surveys – a lot of companies are driving those changes. It’s unfortunate I think that companies like Swire, who were at the forefront of that technological industry change, who have had to close their doors because of a lack of work. While on the one hand, oil companies are pushing for change there’s a reluctance to engage and work with the companies that can help them achieve that change.

“Turning to the North Sea and what we’re expecting, again it’s a tricky one.  This time last year everyone was expecting a busy twelve months and it didn’t materialise. Though people are hoping the next year will bring the work, confidence has taken a hit. Certainly cable installation is going to continue to be busy, with the full-throttle push for offshore wind and interconnector projects as governments around Europe work to meet targets for climate change. And one thing that we’re hearing which is really interesting is that 2020 may be the first time in many years that CAPEX and OPEX will match each other. That means there’ll be an increased volume of work but it’s hard to tell when it’ll materialise – more likely 2021. We know companies have been waiting for some indication of stability – it seems to look like we’ve got some and companies may well just make a break for it because they can’t keep holding off on plans indefinitely.

“I love to see what’s happening with renewables and the sector’s march across the globe is good news. Despite whatever the Trump administration might think about it, renewables – offshore – is big business. A lot is happening here, but also in Asia and Brazil – and it’s all being done by European companies. They’re in a great position to export their skills and services to new locations. This is a really exciting sector.

“For our people, I can’t pretend it’s easy-breezy. We’re in a time of major disruption and people need to get on board with it or risk being left behind. Freelancers in particular need to have an eye on future-proofing their employability in the offshore industry as it undergoes changes, specifically with automation. A lot of our clients are making a big push in this area, which makes sense as it can remove both substantial risks to people but also increase efficiencies and reduce costs. So while you could see that as a worry – it’s can also be an opportunity if you’re willing to see it with another lens. Not only can it improve the quality of the work you do, it can help push you into a different role that would be less repetitive and more thoughtful or creative. The industry is evolving, and people need to as well.

“Software programming courses like Python will probably become very valuable – GIS is being used a lot more. But it’s down to the guys themselves to find out what they’re interested in. And Precise is here to facilitate that – if people want us to host training courses, let us know. We’ve done ones over the last year which have gone really well. It’s great to see several people get employed off the back of it and to see the positive impact that it can have.

“What’s 2020 going to be like for Precise? The next big project we’re working on is our report on IR35 and what it means for the industry. We’ve been speaking to a range of experts in this area over the last two months because people are conscious it could pose a significant.  In January, we’ll be putting out our paper with advice to help you stay compliant.

“We remain committed to improving our customer service, the quality of people we send out to our clients and keeping things simple – what we do isn’t the most complicated, but it is very easy to do it badly. We have some fantastic clients which we want to support in any way we can. At the end of the day, we will keep doing what we do best – putting our people and our clients’ needs first.

“And we’re also turning seven years old – which is a bit of a milestone. Look out for your party invites!”