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Diversifying out of oil and gas ‘absolutely what companies should be doing’ says Sir Ian Wood

Sir Ian Wood has said diversifying into areas out of oil and gas is “absolutely what companies should be doing”.

The former oil tycoon-turned-philanthropist said the “high-risk” industry “can’t deny what’s happened over the last 30 years” in terms of the severe downturns it has experienced.

Sir Ian, once head of the energy services giant Wood Group, now Wood, was asked whether the trend is “something to be concerned about” as firms are “moving from classically oil and gas into other sectors”.

He said that, while it shouldn’t come at the expense of oil and gas or grasping energy transition opportunities, he would “encourage” companies to make moves elsewhere to “spread risk” and give themselves a “broader base”.

During the Energy Exports Conference on Monday, Stuart Broadley, CEO of the Energy Industries Council (EIC), asked his opinion on a recent report showing that nearly 75% of the oil and gas supply chain firms who are diversifying are doing so outside of the energy industries, into areas like infrastructure or defence.

Sir Ian said: “I think it is absolutely what companies should be doing. The oil and gas industry is a great industry, but, goodness me, it’s had its ups and downs over a long period of time and therefore there must be real strength in diversifying.

“If you’ve got the knowledge and experience which goes in to some of these other industries, and I know a lot of you have, then why not broaden your risk? Why not mitigate your risk and spread your risk?

“I would frankly encourage you into that. Not at the expense of what you’re doing in oil and gas, not at the expense of tackling the new renewable opportunities, but just to give you a broader base.”

Sir Ian said he’s lived through “five or six downturns”, all of which were “pretty dramatic”, adding that he’s proud that his former company Wood has “hugely diversified” into a range of other industries outside of oil and gas.

He also said that, for oil and gas firms, the energy transition would be his “prime target” due to the strengths of the industry overlapping into these other areas like carbon capture and storage (CCS) and offshore wind.

“We’re really lucky, we’ve got this huge new opportunity with the energy transition, and it is huge”, he said, “so I would certainly say spend time on that”.

“That would be my prime target right now from oil and gas because there’s a huge overlap of skills and technology across offshore wind, moveable offshore wind, CCS, a whole lot of that straight into the North Sea expertise, so I would definitely advocate that you spend time on that.”

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