Scotland’s oil and gas firms to create thousands of jobs

SCOTLAND’S oil and gas industry remains firmly fixed in “growth mode”, with three-quarters of companies expecting to take on thousands of extra staff in the next two years, according to a report out today.

While other sectors of the economy struggle through the public-sector cutbacks, jobs being axed and the eurozone debt crisis, Aberdeen’s role as the oil capital of Europe continues to bring in work for Scottish firms.

Extra orders from existing customers and more work overseas in emerging markets continue to stimulate the sector.

One in three large companies is on course to create more than 1,000 jobs each before 2014, while 28 per cent expect to recruit more than 500 workers.

The benefits of taking on extra work and creating jobs will also filter through to other firms, with 83 per cent of companies predicting they will place more orders in their supply chain.

A rise in the value of orders of just 3 per cent could generate nearly £400 million for the supply chain, according to Lloyds Banking Group, which carried out the research. Some 100 “decision makers” from the oil and gas industry were questioned for the survey last month.

Alasdair Gardner, managing director for Lloyds Bank Corporate Markets in Scotland, said: “The net result of larger contracts and more orders for products and services is more jobs.

“Oil and gas companies already know they will need more capacity to handle the extra business coming their way next year and that is heartening news for the economy and for the jobs market. The strategic importance of Aberdeen as an oil and gas centre of excellence should translate into jobs in the north of Scotland, particularly.

“While market consolidation and technological innovations are creating new opportunities for oil and gas companies at home, emerging markets around the world are now realising their potential – so growth in the sector will come in many guises.”

But businesses working in the energy sector warned that obstacles still lie in their way. Nearly half said there were not enough trained workers to fill their existing vacancies.

Doug Duguid, managing director of Aberdeen-based mechanical engineering firm EnerMech, cautioned: “We want to create more jobs – the issue is finding the skilled staff we need to meet demand for our services.

“We are recruiting skilled workers for all our service lines in the offshore industry but some disciplines are difficult to find, for example the number of hydraulics and valve technicians available is not high.

“The industry must put a focus on training and apprenticeships if we are to meet the full potential suggested in this report.”

Enermech has secured £24m of lending from Lloyds and has doubled its headcount this year to more than 300 staff.

Other challenges highlighted by the report include taxation, which nearly 40 per cent of firms interviewed said was a barrier to growth. Their warning comes after the Chancellor’s surprise North Sea tax hike in the Budget, which many firms claimed would stifle investments.

News of the positive report on the health of the sector comes after a series of deals involving Scottish companies.

Last week, London-listed energy services firm Wood Group launched a joint venture in Angola, netting a major contract from oil major BP in the process.

And Aberdeen-based Energy Environmental Group signed a licensing deal with Thermogen Industries – a subsidiary of US investment firm Cate Street Capital – to use technology developed in the oil and gas industry to make wood pellets that can be burned in coal-fired power stations.