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Cable gives backing to industry in North Sea

Vince Cable: live link
Vince Cable: live link

The North Sea oil and gas industry was given the backing of UK Government business heavyweight Vince Cable yesterday at an energy summit held to coincide with the Olympics.

The business secretary said building up and supporting the oil and gas sector was a clear target for the government, alongside the nuclear rebuild policy and support for renewables; particularly offshore.

A shadow event, held in Aberdeen with a live link to the London conference at which Mr Cable was speaking, also heard that the North Sea oil industry was expected to remain busy in the long term, although skill shortages were still a major issue.

Oil-industry executives from the Granite City said action was being taken, but that in the short term there was a need for engineers and project managers and that training people was the key to solving the problem.

Sandy Clark, European director of strategy at Amec, based in Aberdeen, said the industry was busy, and it would remain so long term.

He added: “The message is that, if you think it’s busy now, you have not seen nothing yet.

“This is not a short-term spike, this is a long-term step change for the region.

“We fully expect to see more consolidation of operators; which will help some projects currently constrained by funding.

“There will also be more new entrants in the next few years. At the last count, there were seven major operators looking for new headquarters in Aberdeen. Indeed some with newly-built offices are also looking to expand already.

“No one is doing that with a three to five-year horizon and they are all here for the long term.

“The really obvious issue which we are all talking about is people and every one of these new assets requires a complete operating team to support them.

“It doesn’t need a mathematician to see this will be where the major bust is coming without some radical and joined-up thinking.”

Mr Clark said Amec’s Europe and west Africa business, based in Aberdeen, had seen rapid growth and was approaching a turnover of £1billion. Last year, it took on 2,500 new staff and the growth was continuing this year.

He said looking ahead, the growth would continue, with an estimated 30 fixed platforms for 16 operators proposed, plus eight to 10 major brownfield developments and new floating production and storage vessel requirements.

Trevor Garlick, BP regional president for the North Sea, emphasised the long future it would have. He said two new platforms on Valhall in the Norwegian sector had extended the field’s life by 40 years.

However, he added that a drop in drilling activity should not be ignored and that, for the sector to be a success, continued and more collaboration between the Treasury, government and industry would be needed.

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