Oil capital of Europe still on top of its game

This week sees Aberdeen play host to one of Europe’s most important gatherings for the oil and gas sector. SPE Offshore Europe has been coming to Aberdeen for 40 years and it won’t be lost on many of the delegates attending on 3-6 September that the boom days for the North Sea are in the past.

Indeed much of the run-up to this year’s event has concentrated on the question of how much is left of our oil and gas reserves, and how can we best access what is there?

In its recent annual report trade body Oil & Gas UK highlighted the record investment this year of £13.5 billion in the sector. But it also noted the sharp fall in output of 19 per cent during 2011 and 14 per cent in 2012. We could expect a further decline of 8.5 per cent during 2013, with no recovery expected next year.

What the report seems to say is that we have to work harder than ever before for each barrel of oil we wish to extract from the North Sea. The unit cost per barrel for extracting oil from British waters, known as the UK Continental Shelf (UKCS), has gone up four-fold over the past decade.

So little wonder that much of the focus in Aberdeen this week will be on the role technology can play in extracting oil over the next 40 years.

UK Business Secretary Vince Cable will give a keynote address on this topic on Thursday entitled: “The technology imperative – collaborating today to realise the next 50 years of North Sea potential.”

The danger is that opportunities will evaporate if the industry doesn’t move quickly and collaboratively, which could have serious implications for the UK economy. So what role can new technology play?

Aberdeen has long been recognised as the UK’s oil and gas hub and has become increasingly prominent as a European oil and gas centre. However, it is not just important for exploration and production services only in the North Sea.

Increasingly, technologies and techniques developed in Aberdeen are transferred to oil and gas fields around the world. For example, technologies developed locally to maximise output from some of the North Sea’s mature oil fields can be applied to other oil fields to improve production and extraction ratios.

Likewise, advances are still being made in deviated and directional drilling techniques that are globally applicable in all sorts of environments and the development of deeper reserves such as those west of Shetland, in challenging conditions and geologies, is stimulating new technologies in ultra deep water exploration and production.

And don’t think that Aberdeen’s days as a key oil hub are numbered. The city’s long-standing presence in the oil and gas industry appears to represent an attractively mature forum for oil and gas investors. The projected lifespans of already mature North Sea operations are being extended beyond all original projections due to increased oil prices and technological advancements.

The importance of Aberdeen as a strategic oil and gas centre is epitomised by recent developments to accommodate demand from oil-thirsty China to secure oil and gas supplies. These include the rebranding of Aberdeen-based joint venture Talisman Sinopec Energy UK Ltd and the opening of new offices in Aberdeen of its Chinese-owned shareholder Addax Petroleum UK Limited.

One measure of the growing global influence of Aberdeen-based operations is the number of foreign oil-related patent applications originating from Aberdeen inventors. Over the years we have noticed an increase in the total number of such foreign applications.

This is partly attributable to applications being filed in more individual territories, such as more countries in Africa, South America and Asia; but also due to an increase in the total number of applications for inventions. For example, in several oil and gas sectors, the number of Aberdeen-based applications filed through the international Patent Cooperation Treaty has risen significantly over the last decade.

To help service local demand for protecting and commercialising new technologies, we, as the UK’s largest firm of patent and trademark attorneys, are expanding our presence in Aberdeen.

Our oil and gas group features IP professionals with technical backgrounds who advise on maximising the value of new technologies including exploration, drilling, completion, production, intervention, enhanced recovery, unconventional oil and gas, transportation and processing.

The future for the oil and gas industry may be hard to call. But thanks to technology, Aberdeen looks set to maintain its place at the oil and gas top table for some time to come. 

• Alastair Blake is a patent attorney at intellectual property specialists Marks & Clerk

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