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Oil and gas outlook remains positive

ENGINEERING firms servicing the oil and gas sector believe it will be a relatively strong sector over future years, in contrast to the mining industry. Sydney-based WorleyParsons, the largest engineering company operating in WA, expects the second half of the current financial year to yield better results than the first half. Perth-based Neptune Marine, which specialises in sub-sea engineering, has told the market it has not been affected by the downturn in oil prices. In his report to the company’s annual meeting, WorleyParsons chief executive John Grill said the outlook for the sector remained positive for the remainder of FY09 with the company’s major existing projects not affected by the economic crisis. “WorleyParsons’ most significant international oil company and national oil company customers have considerable cash reserves on hand and several have publicly indicated that their current and expected future upstream budgets will be largely unaffected by near-term credit or other concerns,” he said. Mr Grill was not so sanguine when discussing the outlook for minerals projects. While the full impact of current economic conditions on project development in 2009 was still unknown, he said a significant number of project deferments and some project cancellations were expected, particularly for those requiring external finance. Neptune Marine managing director Christian Lange said the company’s services did not have a direct correlation with pricing and short-term price movements did not dictate long term spending and investment in the sector. “Market conditions remain favourable, we have not witnessed any slowdown in demand for our services,” he said.

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