Aberdeen to keep place as global energy powerhouse, chamber survey says

Oil and gas firms are convinced that Aberdeen can cement its place as an energy powerhouse while making the transition to a low-carbon future.

And a new report has highlighted that North Sea companies are showing their confidence in the future by investing in research and development technology, staff training and new markets.

More than a third of firms are “actively diversifying” into non-oil and gas operations, according to Aberdeen and Grampian Chamber of Commerce’s (AGCC’s) 30th oil and gas survey.

However, a similar proportion of the 99 oil and gas operators and contractors questioned by Fraser of Allander Institute don’t plan to diversify further.

More than two-fifths warned that a lack of experience and skills within their organisation was the biggest barrier to making progress.

Concerns about the profitability of new services, limited access to capital, and the current political environment were also cited as obstacles.

Moray Barber, a partner at professional services firm KPMG which sponsored the survey, said the UK “has a problem” if many employers fear they don’t have the right skills within their workforce to “manage the transition”.

Mr Barber said more investment in the skills and ability of young people was required at schools and universities to inspire them to work in the sector.

AGCC research and policy director Shane Taylor claimed Aberdeen had an “incredible opportunity to leverage its reputation in oil and gas and lead the energy transition”.

He was most heartened by the finding that 90% of respondents were optimistic about the long-term future of the Granite City as a global energy centre.

And he added it was “positive to see” that economic development bodies’ efforts to create the perception that the region has a strong future appeared to be paying dividends.

The region also benefited from significant spending on infrastructure during the downturn and the highest proportion of firms since 2007 reported an increase in R&D investment.

That level of spending is expected to continue rising in the near term.

Contractors demonstrated their confidence in the North Sea’s future, with 45% saying they had increased investment in the basin in the past year.

Two-fifths of firms boosted their headcounts in the previous 12 months, and many expect to spend more on staff training between now and 2021.

Almost three quarters (72%) of companies involved in the study expect their profits to rise this year.

Mr Barber said: “It is extremely welcome to see the results pointing to increased investment in staff training, developing new markets and maintenance of infrastructure.

“It is also positive to note that 35% of respondents say that funding and tax incentives influence their decisions to invest in research and development in the UK.

“The report tells us that there has been investment pick up, but we need to be cognisant of the fact that this is starting from a relatively low base from the challenging times the industry was facing four or five years ago.”

Mr Taylor added: “Our survey paints a picture of an optimistic industry, investing to deliver the opportunity of a productive UK Continental Shelf (UKCS) and a vibrant future for Aberdeen as an all energy hub.

“The levels of optimism reported in our survey are encouraging for those of us passionate about the future of the region.

“It’s excellent to see an overwhelming majority of firms are optimistic about the long-term future of Aberdeen as not just Europe’s oil and gas capital, but as an all-energy hub which will be relevant long after the UKCS comes to the end of its operational phase.”

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