DCSIMG

Oil and gas industry may benefit from investment rise

Energy Minister Fergus Ewing highlighted the figures during a visit to the Offshore Europe conference in Aberdeen. Picture: Neil Hanna

Energy Minister Fergus Ewing highlighted the figures during a visit to the Offshore Europe conference in Aberdeen. Picture: Neil Hanna

The oil and gas industry in Scotland is well positioned to take advantage of a projected 73% increase in global offshore investment, according to a report.

The rise over five years equates to capital spending of about 614 billion US dollars (£393 billion), the Global Spends and Trends summary shows.

Energy Minister Fergus Ewing highlighted the figures during a visit to the Offshore Europe conference in Aberdeen.

“Scottish companies are continuing to work together on an international scale in cementing Scotland’s global reputation within the oil and gas sector,” he said.

“Scotland is leading the way in the world of oil and gas and has a clear competitive advantage in this truly global industry. There are huge opportunities open to us from Angola to Brazil and we are determined to make the most of them.

“Decades of experience recovering oil and gas from the challenging North Sea has given Scottish companies the expertise needed for oil and gas production and exploration, expertise which is helping our companies gain contracts in countries around the world.”

As well as capital investment, the report projects that operational expenditure will increase by 55% to a total of 640 billion US dollars (£410 billion) over the same period to 2017.

The report looks at investment by key markets, such as North and South America, Asia-Pacific and the Middle East.

The Scottish supply chain comprises about 2,000 companies domestically and internationally and directly employs about 100,000 people.

“Given the size and diversity of the Scottish oil and gas supply chain, the sector is well positioned for continued growth providing support across the value chain,” the report states.

Growth in the US, Canada, Norway, Australia and Angola will offer significant opportunities for sales.

The report notes decline in production from the UK continental shelf in recent years but concludes the domestic market still offers opportunities.

A predicted 130% increase in subsea production, seen as a major area of Scottish expertise, will be a key area for growth, the report suggests.

But the emergence of foreign suppliers is a warning to the industry.

“In the case of fabrication, Scottish contractors will come under continued pressure from foreign suppliers,” the report states.

“Indeed, foreign fabrication yards have become increasingly prominent suppliers into the North Sea and Scottish companies will need to leverage their track-records of timely and safe project delivery in order to compete with foreign firms.”

David Rennie, head of oil and gas at Scottish Enterprise which was involved in producing the report, said: “Encouraging more companies to look at how they can develop trade opportunities in new markets overseas is one of the key priorities of Scotland’s industry-led oil and gas strategy.

“Our figures on international activity by the Scottish supply chain show a 5.8% increase in total supply chain sales from the sector to £17.2 billion in 2011-12, with almost half of that total, £8.2 billion, going to international markets. Scottish companies now operate in over 100 markets across the world.

“We know that exporting is a key route for growth for companies, and these spends-and-trends reports highlight the huge scale of the international opportunities for Scottish businesses in the field of offshore operations.”

 

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