Energy supply chain companies in eastern England are escaping the worst effects of the North Sea industry downturn by keeping prices low and developing new solutions to drive down costs further, according to an industry leader.
An “east of England mindset” that is focused on being competitive and inventive on contracts was helping to protect businesses from the worst bite of the oil price crisis that has affected the industry and supply chain in Aberdeen, James Gray, director of the East of England Energy Zone, said.
This survival success was drawing interest from Scotland-based companies looking for solutions to their need to cut costs, he said.
Nineteen companies from the east of England attended Offshore Europe in Aberdeen earlier this month under the banner of Great Yarmouth and Lowestoft.
Gray said: “Companies were targeting our stand because of our reputation for a low cost base.
“The most asked question during our four days there was: ‘What is your cost-base like? Can you do it cheaper? Is there another way to do it?’
“This mindset, backed up by 50 years’ experience in the gas industry is keeping our companies as busy as they can be when it is so quiet in the North Sea.”
Whilst encouraging a degree of healthy competition with the north east of Scotland, Gray said that the entire UK supply chain is focused on reducing costs and working to create new opportunities.
“We do see ourselves as partners rather than direct competitors. There are a lot of companies with facilities in Aberdeen and Great Yarmouth. Businesses are looking for options at the minute. It’s tough wherever you might right now.”
At least one big company has now organised a visit to east of England looking to set up a base after meeting economic development officers from Great Yarmouth and Lowestoft, Gray said.
“The message we took to Aberdeen was that we have been a little bit less affected by the oil price downturn than Aberdeen because our main focus is gas, which, although affected, isn’t as affected as oil.
“We were pitching that we have a very cost-effective base with lower property costs and running costs than in Aberdeen.”
Companies were still making investment decisions in the down period, Mr Gray said.
“Now we’re back, we realise what a great showcase Offshore Europe offered to show the alternative offer the east of England has to Aberdeen and the industry has recognised and is appreciating that.
“Companies are looking to reduce their costs. In the good years, they might have been happy to stay with the same companies. Now they are shopping around more to look for lower costs, which is where the east of England is ahead.
“Generally, we not seen the pressuring cost that Aberdeen has had – wages, property and general cost of living are higher up there. We’ve sometimes been quite jealous of that, because it has come from success.
“We are an alternative that isn’t new but with a heritage of 50 years’ proven experience.”
The East of England Energy Zone (EEEZ) was established by the Norfolk and Suffolk Energy Alliance (NSEA), a partnership of regional business and political leaders to smooth the way for future investment and development of the sector.