Aberdeen marches on with oil and gas
0 Comments | Herald, The; Glasgow (UK), Sep 6, 2010 | by MARK WILLIAMSON Analysis
WHILE businesses across Scotland grapple with the fallout from the recession, confidence is surging in Aberdeen. Judging by the crowds in the city’s hotels and the fleets of SUVs clogging the city’s roads, there is not much belt-tightening being done in the Granite City.
For a city which can claim to be one of the centres of the global oil and gas business, there are good reasons to be cheerful. Whatever happens in the UK, breakneck growth in countries like India and China is likely to result in demand for oil and gas remaining strong for years.
Bob Keiller, who led the buyout of the PSN oil services business from KBR in 2006, is relishing working through the $3.1 billion order book the company has built up. This will involve PSN doing an increasing share of its business in overseas growth markets like West Africa.
But Mr Keiller reckons there will be plenty of work to be done closer to home for years.
“We see at least another 20 or 30 years of solid activity in the North Sea,” he told The Herald.
Other industry leaders share that view. They believe that if the Government ensures the right conditions are in place there could be enough activity in the North Sea to keep tens of thousands of people in well-paid work into the middle decades of the century. The industry currently employs around 40,000 people directly working in and out of the Aberdeen area.
While many fields are now in decline, Mr Keiller notes that Aberdeen should benefit from the huge volumes of work that will be done on decommissioning the rigs, pipelines and processing facilities developed over the last 40 years.
Mr Keiller’s “gut feeling” is that estimates that decommissioning could be worth $30bn to the UK are conservative.
He believes firms like PSN have the skills to dismantle the huge collections of complicated engineering systems that sit on top of platforms. PSN has already won work on decommissioning one of the four platforms used on the Brent field.
In Peterhead a consortium of seven companies, working with the harbour authority, hopes to ensure that the town becomes the preferred choice of operators who are looking for a deep water port to bring redundant platforms ashore.
Scottish Enterprise has bought land as a base for decommissioning work to encourage private sector investment.
The excitement about the industry’s prospects is offset by the recognition that even decommissioning work may slow to a trickle within decades. What will the city do then to persuade firms to base themselves in Aberdeenshire?
Leaders on both sides of the public and private sector divide appear to share a conviction that Aberdeen is ideally placed to capitalise on the next revolution in the energy business.
Industry veterans believe that the engineering skills that have been developed by the 900 energy firms that have a presence in Aberdeen will be in big demand if the UK is to achieve the targets set by the Government in the third offshore licensing round.
The wind farms required might feature as many as 7000 offshore turbines, which will need to be connected to shore-based power networks by miles of pipelines.
Ron Cookson, who heads the Aberdeen operations of Technip, the French services giant, says the project processes involved in commissioning an oil or gas rig would be “very transferable” to the business of developing a wind farm.
“The Aberdeen supply chain can play a significant part in offshore wind,” says Mr Cookson.
Technip chose Aberdeen to be the headquarters of its renewables business and tasked Mr Cookson’s team with developing the company’s initial strategy.
David Doig, chief executive of the industry training body OPITO, notes that the safety and training systems developed by the oil and gas industry in Aberdeen could be adapted by renewable firms.
As lots of companies that have bases in Aberdeen are already active in many overseas markets, they should be well placed to capitalise on what is expected to be a global boom in the development of renewable energy.
The city fathers expect Aberdeen to morph from a global oil and gas capital into becoming a global energy capital.
Leaders from the public and private sectors have also combined to try to ensure that the region makes the most of other attributes that could ensure it enjoys a prosperous future.
These include strong universities, a very successful food and drink industry and beautiful locations in which people can enjoy an enviable quality of life.
Working through the Aberdeen City and Shire Economic Future organisation, local leaders have mapped out a 20-year regional plan
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