North Sea a third full – challenges and opportunities
With some 40 billion barrels of oil taken out of the North Sea and 20 billion remaining, the glass is still a third full. Optimism and investment remains high with over £14 billion invested last year and over the next two years 39,000 jobs are expected to be created in the Oil and Gas sector. According to research commission by the Bank of Scotland carried out by BDRC 69% of executives in the industry where optimistic for growth in the coming year. According 38% of those surveyed a shortage of skilled workers is expected to be a challenge.
These businesses are also looking at diversification with an half looking at branching into shale gas extraction, and a third looking into renewables. Currently there are various plans for offshore wind farms. Also tide and wave technologies are under development. Many North East businesses currently involved in Oil and Gas could become involved.
It is not just in the North Sea that opportunities are to be found. Aberdeen and the North East is increasingly becoming a global hub, with 44% of income generated internationally, 64% of those surveyed saw international expansion as a priority with 46% planning growth abroad. A recent report by PwC said international sales where worth £8.2 billion in 2011.
With peak production passed, PwC warns that the North Sea needs "a new vision and new ways of working" citing improvements to the supply chain through greater efficiencies and collaboration between the different operators. Also the decommissioning of old platforms and dry oil fields presents an opportunity for businesses based in the region, put at being worth £35 billion by PwC.
The recent review of the industry by Sir Ian Wood also called for greater collaboration and shared infrastructure and reducing complexity in legal and commercial processes. He also called for a new "Arm’s length" regulator. Currently a number of different government bodies are involved in regulation.
The Oil and Gas in the North Sea is becoming harder to reach. The more recently found fields west of Shetland are in deeper waters, and older fields lose pressure making it more complex and labour intensive to extract. These challenges require technology and innovation and businesses that can seize these and opportunity.
Softengines has recently been involved with the Oil and Gas sector in Aberdeen as a provider of IT skills.
April 2014
| Duncan Stonebridge.
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