Scotland’s oil and gas international reputation remains strong in challenging times

Scottish Enterprise’s annual Survey of International Activity in the Oil and Gas Sector shows the sector delivered £11.4 billion of international sales, made up of £4.1 billion of direct exports and £7.3 billion of sales via international subsidiaries.

The research also reported an increase from 115 to 130 in the number of countries Scotland trades with and sales to non oil and gas markets have increased to £0.8 billion, over four times the figure in 2012, suggesting an increase in diversification focus from the sector.

Commenting on the results, head of oil and gas at Scottish Enterprise, David Rennie, said: “As we look to grow Scotland’s oil and gas sector, supporting international activity remains a key focus for us.  Despite seeing a seven per cent decline in our overall international activity, a casualty of the global downturn, international activity still accounts for more than half of total supply chain sales. We’re also seeing increased interest in a number of overseas markets in recent years such as the Middle East.

“Through the Energy Jobs Taskforce, we have delivered a significant amount of support to companies around key areas such as innovation, diversification, leadership and internationalisation.  An example of this was a series of new market guides published late last year to help companies understand more about potential new markets.

“Helping companies to grow their international activity saw 59 companies join us in May on the Scotland pavilion at OTC in Houston, one of the world’s largest oil and gas shows.  Events like these make a huge difference to companies looking to grow their international presence, helping them showcase their world-renowned skills and experience and build important new contacts.”

Scottish Government Minister for Business, Innovation and Energy, Paul Wheelhouse, added: “This latest International Activity report, shows that despite the on-going challenges that the sector has been facing throughout the oil and gas industry, the Scottish supply chain is maintaining its strength with around half of the supply chain sales based internationally.  This report, and recent industry announcements around domestic production, such as Centrica’s announcement to invest £35 million at the Chestnut field, extending the life of the field and trebling production, and the starting of production from BP’s Quad 204 field present welcome evidence of returning confidence and optimism to the sector, albeit we remain vigilant given this is still at an early stage.

“With up to 20 billion barrels of oil equivalent estimated to remain in the North Sea basin, Scotland's oil and gas industry has a bright future for decades to come. Our draft Energy Strategy clearly outlines that we remain committed to maintaining domestic oil and gas exploration and production, and Maximising Economic Recovery.” 

According to the survey, the United States, Norway, Netherlands, Australia and Canada were the top five markets for international activity during 2015.  Looking ahead, and similar to last year, the United States, Norway and the United Arab Emirates remain the top three countries for growth opportunities in the immediate future and over the next five years.

With its headquarters in Aberdeen and offices in Abu Dhabi and Kuala Lumpur, Aberdeen Drilling Consultants (ADC) is no stranger to working internationally.  The firm operates worldwide inspecting rigs, BOP’s and their complex software controlled systems.  Recently, the company has been working with Scottish Development International to grow its international ambition and at the end of last year, announced it had set up an office in Houston to maximise opportunities in the region.  The company is currently based in Scottish Development International’s incubator space. 

Commenting on its international activity and the support it has received from Scottish Enterprise and Scottish Development International, ADC Director, Austin Hay, said: “International activity is a key part of our business and with a number of our clients based in the Americas it made sense to open an office in the epicentre of the global oil and gas sector, Houston.                                                   

“Scottish Development International has been a great support, keeping us right with local strategies and helping with introductions. Being based in their incubator facility also gives us full time access to on-site business development support. Our reputation and performance has allowed ADC to take advantage of this support working for oil companies operating in the Gulf of Mexico and throughout the Americas ensuring rigs are fit for purpose and has allowed us to make the most of our move to Houston.”

The survey, which was delivered by Aberdeen Chamber of Commerce on behalf of Scottish Enterprise, captures responses from 295 companies employing over 63,000 employees in Scotland and active in 130 markets worldwide.

Commenting on the survey, Aberdeen Grampian Chamber of Commerce research & policy director, James Bream, said: “One of the key findings is the increased levels of business companies are doing outside the oil & gas sector which demonstrates that the talent within these companies has applicability in many contexts. Anchoring this talent and expertise in Scotland will retain our place at the forefront of the oil & gas industry as well as supporting wider diversification.”