Lee Roan: Whatever the statistics, oil and gas sector faces key period

Only last week First Minister Alex Salmond pronounced that the North Sea, far from being in decline, was good for another £1 trillion over 40 years. Meanwhile, today at an event hosted by 3M in Aberdeen, Scotland’s foremost energy economist, Tony Mackay, offers a more conservative outlook, predicting that capital expenditure in the energy industry will average about £8.5 billion a year until 2014 and thereafter steadily decline to £4.3bn by 2020. He predicts that over the decade to 2020 capital expenditure will total £66.5bn, giving an average of £6.7bn a year.

What does this actually mean for people who work in the oil and gas industry day in, day out? Figures aside, it is important that oil and gas businesses make the most of current investment levels. Mr Mackay predicts capital expenditure will decline substantially from 2014. This means we have a two-year window to secure the best deals and plan ahead for market changes. We believe that sharp negotiating skills, smart technologies and innovative products are the only way to enhance business productivity in a tough economic climate.

It is a sobering thought that negotiation specialist the Gap Partnership believes poor negotiating skills could be costing the UK economy a staggering £75bn a year. We work with the Gap to develop our negotiating skills as we know the resulting changes in behaviour can achieve measurable results, particularly when it comes to profits.

That is why we are passing on our top negotiating tips to the people in the oil and gas industry whose job it is to do this on a daily basis. Any deals done today also have to keep a well-focused eye on tomorrow’s market. A tactic former Conservative prime minister Disraeli might well approve of.

• Lee Roan is the business manager for energy markets at 3M and along with Tony Mackay will address procurement managers in the oil and gas industry today at the Satrosphere Science Centre in Aberdeen