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UK Oil and GasBusiness and Government Action

March 2013

Industrial Strategy: government and industry in partnership


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1. Foreword 2

2. Underlying Rationale 4

3. Strategy Overview 6

4. Safety 8

5. UK Supply Chain: Domestic andInternational Growth 10

6. PILOT 13

7. Access to Finance 15

8. Technology 179. Skills 21

10. Awareness of the Industry 24

11. Engaging with Other Industries 26

12. Decommissioning 28

13. Fiscal Regime 29

Annex A: Aggregation of Projectsand Responsibilities 31

Annex B: SWOT Analysis 37 Annex C: The Oil and GasIndustry Council 44

Annex D: Key Website Addresses 45

Annex E: Sources 50

Contents


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2 | UK Oil and Gas | Industrial strategy: government and industry in partnership

This strategy is jointly owned by Governmentand industry. It has the following aims:

1. To maximise the economic production ofthe UKs offshore oil and gas resources;

2. To sustain and promote the growth ofthe UK industrys supply chain, in bothdomestic and international markets;

3. To promote purposeful collaborationacross industry and between industry andGovernment.

This strategys goal is to put Government andindustry on the right path to ensure futuredecades of investment and production in theNorth Sea. Quite simply, we want to maximiseeconomic recovery of oil and gas from theUK Continental Shelf (UKCS) and support adynamic supply chain which sustains highquality jobs in the UK.

It is a huge national advantagehaving such a brilliant oil andgas industry the Rt Hon DavidCameron MP, Prime Minister, 13October 2011.

The words of the Prime Minister rightly sumup the contribution the oil and gas sector hasmade to the UK economy over the past vedecades. There is no other industrial sector

which has created more prosperity for theUnited Kingdom.

As the UK pursues a long-term processto decarbonise our society, we will needsubstantial amounts of oil and gas. Gaswill assist, for example, the transition awayfrom coal powered generation. Low-carbontransport is unlikely to replace all petrol anddiesel vehicles for two or more decades.Britains energy security and long-termeconomic performance will benet hugelyfrom maintaining the health of this keyindustrial sector.

The UK Government is committed to workingwith the oil and gas industry to create theright conditions to maximise opportunity andinvestment to the benet of the whole UKeconomy. By utilising the strength and scaleof the UK we can ensure that the energysector as a whole continues to thrive anddeliver.

1. Foreword


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UK Oil and Gas | Industrial strategy: government and industry in partnership | 3

The Rt Hon Dr Vince Cable MP, Secretary ofState for Business, Innovation, and Skills

The Rt Hon Michael Moore MP, Secretary of

State for Scotland

The Rt Hon Edward Davey MP, Secretary ofState for Energy and Climate Change

Mr Gordon Ballard, Chairman of the Oil and

Gas Industry Council


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The UK supply chain is integral to thesuccess of the UKCS. Industry andGovernment recognise that supportingthe UK supply chain domesticallywill have positive spill over effects onultimate recovery from the basin, UKGDP, employment and taxes.

The UK supply chain is well positionedacross the value chain with 1,100companies achieving combinedrevenues of 27 billion in 2011 3.

It is internationally recognised as aglobal leader in subsea engineeringand a centre of excellence in projectmanagement, design engineering,asset and operational management,design and manufacturing ofadvanced equipment, research anddevelopment, safety managementtraining and education and

professional and nancial services.3. To promote purposeful collaboration

across industry and between industry andGovernment

The challenges facing the basinhave continually evolved. Futurediscoveries and average eld sizes willbe more technically and commerciallychallenging and new markets such asdecommissioning will emerge. In order

to align with the shifting dynamicsof the basin, industry will need tocollaborate further.

The rationale behind thesestrategic aims is as follows:1. To maximise the economic production of

the UKs offshore oil and gas resources

There is an over-riding case tomaximise recovery of the UKs oil andgas with 70 per cent of British energyrequirements still likely to be met by oiland gas into the 2040s. 1

Maximising domestic supplies of oiland gas, including both offshore andonshore unconventional resources,leads to increased resilience andsecurity for the UKs energy needswhen compared with imports.

Stemming the rate of decline of oil andgas production from the UKCS hasthe potential to increase greatly UK taxreceipts, not only by way of production

taxes but also through corporation taxpayments from the supply chain andemployment taxes. Looking solely atproduction taxes, projects recentlyapproved in 2011 and 2012 alone willgenerate an additional 25 billion intax.2

Extending the economic life of aeld also results in the deferral ofdecommissioning costs.

2. To sustain and promote the growth ofthe UK industrys supply chain, in bothdomestic and international markets

2. Underlying Rationale


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The industry already has importantlinkages with UK Governmentdepartments: DECC, HMT andDWP/ HSE and with the ScottishGovernment. Together these coverthe areas of licensing, environmentalperformance, health and safety, andscal matters. However there is spacefor greater collaboration betweenindustry and BIS on matters suchas skills, technology and access tonance.

A stronger link with industry andGovernment, including UK Trade andInvestment (UKTI), will support theindustrys export ambitions.

Image courtesy of Oil & Gas UK


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It sets out a number of specic actions whichformalise this closer collaboration betweenGovernment and industry. Some, such asthose aimed at developing the skills requiredand improving access to nance, are alreadyused in other sectors of the economy andare applicable to oil and gas. Others, suchas offshore safety and decommissioning arespecic to the oil and gas sector.

The UKs world class oil andgas industry, comprising bothproduction and the essentialsupport services, is a vital part ofthe economy and the focus of thisstrategy.

The SWOT section in Annex B looks aheadto future potential opportunities and threatsand also gives a snapshot of the strengthsand weaknesses present today.

The industry:Provides a source of employment for over400 thousand people across the UK (45%Scotland and 55% England, Wales andNorthern Ireland)4

Is Britains largest industrial investor andis investing more than ever before (11.5billion in 2012 and DECC forecasts

investment of 14 billion in 2013) 5. Meets almost one half of the UKs total

primary energy needs. Boosts the balance of payments by

almost 50 billion a year, according toindustry estimates, by reducing oil andgas imports, and by exporting goodsaround the world.

Has a strong domestic supply chain thathas seen revenue growth each year since2008, reaching 27 billion in 2011 3.

The strategy will support objective, well-informed policy making across Governmentfor the oil and gas sector.

3. Strategy Overview


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The Maintenance and ReviewingProcess for this StrategyGovernment and industry have cometogether in the form of the new Oil and GasIndustry Council, which is co-chaired byBIS, DECC and a leading member of theoil and gas industry. The Council, whosemembership comprises Ministers, ofcialsand key industry players, will provide theleadership needed to drive implementation of

this strategy. In particular it will establish themechanisms and resources needed to deliverthe actions listed, develop success criteriaby which to check on progress and publishreports from time to time.

Following the launch of this strategy, theIndustry Council will meet to prioritisethe actions and assign responsibility tothe relevant industry and Governmentstakeholders, except for the scal regime

actions which are the responsibility of HM Treasury. The Industry Council will determine,and publish, appropriate success measuresand when they are to be met.

The ongoing review cycle for this strategy willbe as follows:

The Industry Council will meet three timesa year to monitor progress of each of theagreed projects supporting the aims of thestrategy using a trafc light system.

The strategy will be reviewed annually, andwhere appropriate, revised, to ensure thatit is a living document.

Image courtesy of Water Weights Limited


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Action Plan This strategys overarching aims aresupported by a series of initiatives which aregrouped under the following headings:

Safety,

UK Supply Chain: Domestic andInternational Growth,

PILOT, Access to Finance,

Technology,

Skills,

Awareness of the Industry,

Engaging with other Industries,

Decommissioning,

Fiscal Regime.

Through the Fiscal Forum and extensionsto eld allowances, the UK Governmenthas worked with the sector to maintain anunderstandable and stable scal environmentto encourage growth and allow business toinvest with condence. Government providesthe leadership required to deliver the UKsenergy and wider prosperity goals. TheEnergy Bill 2013 and the Gas GenerationStrategy of November 2012 set out a cleardirection to deliver sustainable, affordable andlow carbon energy for the UK. The oil and gassector has a central role to play in deliveringthis for the country.

The Scottish Government published aScottish industry led Oil and Gas strategyin May 2012. This focused on many of thethemes to be found in this strategy. As anumber of the above issues are of a devolvednature, full delivery across the UK will bedependent on a close relationship withthe Scottish Government. BIS and DECCalready have a good working relationshipwith Scottish Enterprise. The strategy

implementation will need to look at how toformalise that relationship.

This strategy is the start of a new approachwhich will show how industry andGovernment are working together. Giventhe importance of the upstream oil andgas sector to national and local growththroughout the UK and to security of supply,the work of the Oil and Gas Industry Councilwill be supported by a cross-party group ofMembers of Parliament. Terms of referenceand membership of this group will bepublished by DECC and BIS in due course,but the groups role will encompass:

liaising directly with industry to proactivelydrive forward the aims and ambitions ofthe oil and gas industry;

providing a forum for discussing the

barriers and constraints within the oil andgas supply chain and commission work tomitigate these;

identifying prospects for collaborativeworking including diversication intorenewable sectors;

providing guidance and intelligence toinform the direction and work of theCouncil.

The chair of the group will be invited to attendCouncil meetings.


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4. Safety

Aims Supported 1, 2, 3

Projects and responsibilities: Action: Target date: Responsibility:

Transpose EU Safety June 2015 Government and IndustryDirective into UK law.Implement all programmes Ongoing Step Change in Safetyand initiatives agreed underStep Change in Safety.

and growth. The Step Change Leadership

team includes representatives from industry,trade unions, workforce and the Regulators.Current workstreams include the developmentof a practical guide for workforce engagement,the raising of awareness and understandingof how human factors and behaviours fromboardroom to worksite can cause accidents;helicopter safety; and asset integrity.

Goals:Maintain the strong safety culture and ensurethe industry continues to invest money andeffort in safety and asset integrity through tothe point of decommissioning.

The industry, regulators and trade unionsshare a common goal in seeking continuousimprovement through development ofcollaborative solutions in all aspects of healthand safety. This is an ongoing target supportedby the goal setting regulatory framework putin place following Piper Alpha and the Lord

Cullen Inquiry. Companies have individualtargets to align with their own risk proles andtime frames. However in 2010, the industry seta target to reduce the numbers of hydrocarbonreleases by 50% over a three-year period; theindustry is well on the way to achieving thistarget.

The EU proposes to implement an Europe-wide safety directive which will govern healthand safety practices. This will impact UK

industry. Government, Industry, regulatorsand trade unions are unanimously in favourof ensuring a seamless transposition of theDirective and integration into UK law, withoutadverse effects on the existing world-class UKsafety regime.

Status:Safety is a priority for this industry and as suchis fundamental to all offshore activities. Industrhas shown it is willing to collaborate fully on allsafety-related matters to ensure the wellbeingof its workforce. As well as keeping peopleand the environment safe; good health, safetyand environmental practices are a precursorto increased asset use and are key selectioncriteria in the supply chain procurementprocesses.

Safety is subject to continuous improvementand assets are ageing, thereby providing aconstant challenge. Effective asset integrity,life extension management and safety systemimplementation are seen as a strength in theUK. This strength is not an isolated exampleof good practice, but symptomatic of ahealth and safety regime and culture that arerecognised as world-leading and which aresupported by a legal framework that drives

continuous improvement.Step Change in Safety, the industrys agshipsafety initiative, was set up in 1997 with theaim of making the UK the safest place to work in the worldwide oil and gas industry. In theten years following Step Changes creation,the industry saw signicant improvements inthe fatal and major injury rate, which fell byalmost 70% in this time 6. The numbers ofmajor and signicant hydrocarbon releases,which are the potential precursors to a majoraccident, were also substantially reduced inthis period. Safer operations not only getspeople home, but also results in improvedpublic condence in the industry and helpscreate a stable environment for investment

y


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three stages; plan, contract, perform and pay.

Fabrication has been identied as a specicsector which requires attention. While thereare several UK fabrication yards that activelytender for substantial offshore projects,the majority of recent major fabricationprojects have been awarded overseas toyards that are more cost competitive thanthose in the UK. Without compromisingthe competitiveness of projects in the UK,Government and industry both want to seeUK businesses being given every opportunityto bid for all UKCS contracts.

A comprehensive overview of the UK supplychains performance in terms of exports is notavailable. In the absence of this information,Scottish Enterprise data provides a usefulreference point for underlying trends andactivity. It records Scottish exports to over100 different countries. The report quanties

that Scotlands international activity has risenfrom 1.8 billion in 2000 to 7.5 billion in2010, of which 2.3 billion came from directexports and 5.2 billion came from sales viaoverseas subsidiaries. The majority of saleswere in services to USA, Canada, Angola,Norway and Australia 7. UKTI is focussing ona number of other international high valueopportunities, where there is the best t withUK capability and appetite to engage with theUK supply chain, such as in Australia, Brazil,Iraq, Kazakhstan, Mexico, Libya and Saudi

Arabia.

Status: The development and deployment of theUK supply chain is closely linked to UKCSactivity. With investment in the UKCS atrecord levels coupled with the developingand growing offshore renewable sector theUK supply chain, which recorded revenuesof over 27 billion in 2011 3, has the potentialto contribute signicantly to the growth of theUK economy in the coming decades.

There is a case for refocused Governmentattention on UK content. Converting thecurrent high investment gures into British

jobs is important to the economy and anissue Government cares about. Building oncurrent DECC initiatives, and working closelywith those awarding contracts in the UKCS,will provide a better understanding of thestrengths and weaknesses of the UK supplychain. The development and deploymentof the UK supply chain is as important assecuring investment in the UKCS. The twocan, and should, go hand in hand. Whiledecisions have to be made on competitivegrounds, the Government and industry willwork together to strengthen further the UKsupply chain.

The UKs Supply Chain Code of Practice(SCCoP) is currently supported by more than200 companies spanning the spectrum ofparticipants in the basin. The code outlines aset of best practice guidelines for the UKCSoil and gas industry to improve performance,eliminate unnecessary costs, add value andboost competitveness. It broadly covers

5. UK Supply Chain: Domestic andInternational Growth

Aims Supported 1, 2


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Goals: The full capability of the UK oil and gassupply chain needs to be mapped to supportstrengths and address weaknesses.

This knowledge can then be used by UKTIto help UK supply chain businesses as theyseek to internationalise. Alongside this,Government and industry will continue toshare best practice with, and learn from,other countries oil and gas industries in order

to improve the effectiveness of developingthe supply chain internationally. UK operatorsshould be encouraged to champion thesupply chains technical capabilities abroad.When compiling the list of approved biddersfor UKCS contracts, full consideration will beafforded to UK based businesses deemed tohave the necessary capability and capacity toexecute the work.

As identied in the SWOT analysis, cost

ination is a threat to the long term future ofthe industry. Measures to control cost inationshould be addressed through collaborationwithin the industry in order to maintain costcompetitiveness.

The BIS funded Advanced ManufacturingSupply Chain Initiative (AMSCI) is anotherroute through which the sector might usepublic funds to help develop the supply chain.

The ultimate goal is to maintain a viable

and globally competitive UK supply chainthat not only serves the industry through todecommissioning, but is anchored in the UK.

Image courtesy of Petroleum Geo-Services


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Projects and responsibilities: Action: Target date: Responsibility:Map the UK supply chain,including exports, by valueand destination, to determineareas of constraint andpotential opportunities foradditional support.

Q4 2013 Government and Industry

Provide support for UKbusinesses overseas throughthe UKTIs High ValueOpportunities Programmeand through operatorschampioning the UK supplychain overseas.

Ongoing Government and Industry

Licence holders and majorcontractors to share selectioncriteria with Government priorto awarding a major contract.


Commission work toaddress areas impacting onthe competitiveness of UKfabricators.


Promote Oil and GasIndustry participation inthe Government-funded

Advanced ManufacturingSupply Chain Initiative(AMSCI).


Conduct a gap analysis ofcounterparts in other oil andgas producing countries andtake forward best practices.


Extend the SCCoP torequire that capable UK-based businesses are givenfull consideration whencompiling the list of approvedbidders.



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6. PILO


Status:PILOT is a well established partnershipbetween Government and industry whichaims to maximise the economic recovery ofthe UKs offshore resources of oil and gas.

DECC is taking forward work supportingthe sector through PILOT. This includesProject Pathnder which tracks emergingprojects and developments from 95% ofthe UK operators and provides information

on new eld developments as well asdecommissioning projects. The technologydemand-chain allows operators to informthe supply chain of future challenges. ADECC survey of UK operators identiedsix areas to inform the innovation supplychain and help engender new researchand future development plans: Seismic andReservoir Characterisation, EOR / ProductionOptimisation, Asset Integrity, Life Extensionand Decommissioning, Well Construction andDrilling, Subsea incl. Subsea Tie Backs andHSE/ including post Macondo technologydevelopment.

PILOT is chaired by the DECC Secretary ofState and comprises representatives from theScottish Government, the UK oil industry andthe Scottish Trade Union Council.

Goals: The industry looks to convert safely potentialresources into production. The maintenanceof critical hub infrastructure will be as crucialin the years ahead as it is now. Without thisinfrastructure a large percentage of the UKsremaining hydrocarbon potential will not berealised.

In order to ensure that the productive life ofthe UKCS stretches out beyond 2050, the

industry will need to work in a collaborativestyle, sharing costs and resources to ensurethat the maximum benet is attained. To thisend, PILOT workgroups have engaged on thefollowing objectives:

Improving access to infrastructure;

Increased oil recovery (IOR);

Enhanced oil recovery (EOR);

Improved technology uptake;

Improved exploration success;

Workforce resource issues.


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Projects and responsibilities: Action: Target date: Responsibility:Improve access toinfrastructure:- Receive report of ndings- Implementation of agreedactions.

Q2 2013Q4 2014

Government and Industry

Increase oil recovery:- Receive workgrouprecommendations- Implementation of agreedactions.

Q2 2013Q4 2014


Enhance oil recovery:- Receive workgrouprecommendations- Implementation of agreedactions- Review potential use forCCS CO 2 in EOR.

Q2 2013Q4 2014


Improve technology uptakeby holding a technologyShare Fair event that linksindustrial demands withtechnology suppliers.


Improve exploration success- Receive recommendationsfrom Exploration Taskforce- Implementation of agreedactions.

Q3 2013

Q4 2014


Improving Workforce skills- Create a one-stop-shop information gatewayto attract people into theindustry- Broaden the number ofmodern apprenticeshipdisciplines available as partof the Upstream Oil and Gas

Technician Training Schemeapprenticeship scheme,- Form a partnership withthe Military for people withrelevant transferable skills.



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development of private sector solutions. Thebank will also bring together the strategy,management and communication of existingnance schemes for SMEs.

Goals: The UK has very strong nancial servicesand oil and gas sectors. The two should beworking closely together to create growth.Within the oil and gas industry, there is anincomplete understanding of the products

developed since 2010 to help growth. Thisincludes the role of the newly establishedBusiness Bank. Both industries need to bemade aware of each others strengths.

Status: There are a number of Government schemes,as well as action from the nancial servicessector, geared towards helping businessesgrow. However, the issue of accessingnance is one shared by many companies inthe oil and gas industry and not just smallermembers of the supply chain. Multi-nationaloperators choose where to best allocate theircapital internationally by ranking their portfolioand selecting the projects that deliver thebest returns. The scal regime is an importantcomponent in these company decisions.

Some supply chain companies are requiredto post sizeable performance bonds afterbeing awarded large contracts. This makesthem nancially weaker in spite of winning acontract; a potential barrier to that companysgrowth.

The 2008 nancial downturn has made banks

more risk averse to nancing companiesthrough debt. There are many nancialinstruments currently available to the oiland gas industry, but at present there is anincomplete understanding on the industrysside of how to access them.

The Government has recently announced thatit is creating a Business Bank to help tacklesome of the deep-rooted structural barriersfaced by small and mid-sized businesses

and increase diversity in the business nancemarkets. New funding of 1 billion has beenallocated to the Business Bank to leverageprivate sector investment and encourage the

7. Access to Finance



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Projects and responsibilities: Action: Target date: Responsibility:Raise awareness of thenancial instruments availableto the oil and gas industrythrough the organisation of a

joint industry conference.


Government to engage withindustry on the wide rangeof Government nance

initiatives that are currently inplace.


Help shape the role of theGovernments BusinessBank.


Review supply chain positionin relation to performancebonds and make appropriaterecommendations.



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Status: The development and implementation ofnew technology is of vital importance tomaximising recovery from the challengingUKCS environment, yet overall R&D spend ofthe sector in the UK is reported to be 0.3% ofsales 8; far lower than Norways proportion of4%9.

In the recent past, new technologyhas helped the economics of sizeable

investments. BPs 4.5 billion Clair Ridgeproject includes pioneering full-eld injectionof desalinated water to enhance oil recovery.Statoils 4bn+ investment in Mariner, a heavyoil eld, which was initially discovered in1981, was made possible through innovativetechnological solutions.

The future of the UKCS is likely to seea higher number of smaller upstreamcompanies, smaller opportunities, the need

for higher recovery factors, an increasedfocus on asset integrity, tougher economicsand more bespoke solutions rather thangeneric designs. As such there is a needto reduce cost and invest in technology toensure the longevity of UKCS production overthe coming decades.

The Industry Technology Facilitator (ITF), anot for prot organisation owned by 31 majorglobal operators and service companies,

stimulates joint industry innovation projects.ITF have in recent years widened theirscope beyond the UKCS, but have given anassurance that they will maintain a strong

8. echnology




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Establish a national centre of excellence thatwill enable industry to better understandcomplex reservoirs, reduce drilling costs,improve offshore efciency, enhanceproduction and maintain the integrity ofinfrastructure.

Field recovery factors are an important aspectof the stewardship process. Whilst this datais currently reported to DECC, more couldbe made to share this data in a collaborativefashion in order to champion best practicesamong peer groups and drive up recoveryrates.

The time taken to get new technologies fromproof of concept to market penetration is saidto be faster in Norway than in the UKCS. TheUK oil and gas industry needs to acceleratetechnology implementation to be as fast as,or faster than, Norway. The UK also strives tobe a world-leader in technology development.

Industry should be aware of Governmentwork to ensure that the UK continues to leadglobal research in eight key areas: big data,space, robotics and autonomous systems,synthetic biology, regenerative medicine,agri-science, advanced materials and energystorage.

UKCS based workstream. They will continuewith their international activity providingpotential export opportunities for the UK.ITF will continue to help identify and facilitatenew technologies in support of this strategy where necessary by undertaking ring-fencedUKCS activity.

Research Councils investment in research,skills and technologies are used by theindustry. The National EnvironmentalResearch Councils (NERC) British GeologicalSurvey (BGS) carries out geologicalresearch. BGS hosts the National GeologicalRepository, which is well used by the oil andgas and carbon capture and storage (CCS)industries, and provides valuable skills andtraining. In the area of shale gas, BGS isdeveloping techniques to estimate resourcesand identify drill sites.The reintroduction ofoil and gas onto the Technology StrategyBoards programme should also be a catalystfor increased R&D spend by industry.Goals:Develop and deliver a coherent UKtechnology strategy centred on specicgeographical and technological target areasas dened by PILOT initiatives such asSouthern North Sea, Central North Sea andNorthern North Sea with relation to IOR/ EOR, Infrastructure and Exploration will assist

industry organisations in targeting effortsin developing more specic and focussedtechnologies, relevant to these focus areas.


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Projects and responsibilities: Action: Target date: Responsibility:Study the specic issueof how to speed uptechnology implementationand understand what bestpractices can be taken fromNorway.


Develop and deliver afocussed technology strategy

that anchors key gamechanging technologyinnovations as dened bythe PILOT initiatives andspecic geographical andtechnological target areas.


Establish more effective linksbetween industry demandfor new technology andthe innovation community

by holding an annualtechnology share fair.


Reprioritise the ITFs focustoward the UKCS.


More effective usage ofstewardship data to increaserecovery factors across eldsthat are underperformingrelative to their peer group.


Establish a national centre of

excellence for technology.

Q1 2014 Industry


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Status: The breadth of skills required to sustainthe successful UK oil and gas industrycovers everything from catering to law andaccounting, through to seismic interpretation,drilling, geology and platform fabrication. Thisis in addition to offering some of the mostexciting, challenging and lucrative engineeringpositions in the job market.

The industry is a source of employment

for over 400 thousand workers3

, of which32 thousand are directly employed in theindustry. High levels of activity and globalcompetition have resulted in skills shortages;the availability of sufcient numbers ofskilled workers is seen as one of the biggestchallenges the industry faces. The supply/ demand mismatch is impacting projectschedules and driving up costs; a majorthreat to the overall competitiveness of thesector, as highlighted in the SWOT analysis.

As education is a devolved issue, both UKand Scottish Governments will need to workwith industry on these challenges.

Whilst the larger operator and supply chaincompanies have not encountered a shortageof apprentices or graduates applying to jointhem, smaller SMEs have not found thisto be true and struggle with a shortage ofhigh calibre candidates. With a number ofbusinesses reporting that 30% of graduates

joining them are women 10, the industry ismaking some inroads into ensuring a futureworkforce that is talented and diverse.

Image courtesy of Chevron North Sea Limited

9. Skills



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well as their teachers and career advisors,to get behind the scenes, visit modernmanufacturing operations and discover forthemselves the career opportunities that existin manufacturing.

Over the coming years, the number ofUniversity places in engineering and physicalsciences subject will need to keep pace tosatisfy labour market and student demand.

In the future, a strong energy industry that

has developed from the oil and gas industrymay be able to provide the skills andcapability to support the development of therenewables sector.

Current demand for experienced engineersand geoscientists in the UK (and globally)outstrips supply. The industry expects itwill require an additional 15 thousand staffover the next 4-5 years across a range ofdisciplines, including design engineers (alldisciplines), subsea and drilling.

Many companies operate globally and deploytheir resources on that basis. The impactof immigration legislation is therefore veryimportant particularly given that industryexpertise can be found outside the EU.

Goals: The UK should compete effectively at aworldwide level for talent. In doing so, itwill maintain the long term supply of qualitypersonnel to all disciplines across the industrywhich are required to achieve the goals ofincreasing production and developing thesupply chain domestically and internationally.

The sector is looking to recruit and trainpersonnel from outside the sector (e.g. themilitary) to begin to address the identiedpressure points.

The sector should be able to benet fromGovernments overall push to give studentssufcient access to each of the STEMsubjects at school, as well as the drive toimprove the image of engineering, followingthe advice from the Chief Scientic Advisor,Professor John Perkins, in late 2012. TheSee Inside Manufacturing programmecan also help the industry as it seeks toprovide opportunities for young people, as


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Projects and responsibilities: Action: Target date: Responsibility:Collect data on the industryskills shortage and performskills gap analysis.


Establish a nationalprogramme to retrain ex-military personnel andfrom other industries withthe relevant transferableskills to enable them to beredeployed in the oil and gasindustry.


Map the work being done byBIS to address STEM uptakeissues.


Industry to decide whetherit is to become an activeparticipant in the See InsideManufacturing programme.


Encourage gender diversity inthe industry by encouragingwomen to take up STEMsubjects, including a specicevent at Offshore Europe toattract women to the sector.


Government and Industry towork within the academicenvironment to stimulatestudent demand for

engineering careers.



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Status:Oil and gas currently plays a major role in theUKs energy mix UK homes are heated bygas, cars are fuelled by petrol/diesel and asizeable percentage of electricity is generatedby burning gas. Currently, hydrocarbonsrepresent 75% of the UKs primary energysource 11, and even as we reduce the UKscarbon footprint, hydrocarbons will remaina vital part of our energy system for years tocome.

However, amongst the general public, the oiland gas industry is currently perceived as asunset industry which makes a diminishingcontribution to the UK economy. It isincorrectly perceived that the industry facesan unsustainable future and that it is comingto the end of its life. If this perception persists,talented individuals might overlook theindustry; compounding the skills shortage.

According to Oil & Gas UKs Activity Survey,the reality is that the UK will continue tosupply oil and gas well beyond 2055.On the long term demand side, even ifthe International Agencys New PoliciesScenario is met, global demand for oil andgas is forecast to increase by 28% betweennow and 2035. 21

The industry also suffers from the perceptionthat a strong domestic oil and gas industry

deects progress towards a greener UKeconomy. Government has made it clear thatgas is to be an essential part of the energymix.


10. Awareness of the Industry

Aims Supported 2, 3


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Projects and responsibilities: Action: Target date: Responsibility: A pilot project willsoon be underway toimprove awareness andunderstanding of thecontribution that the industrymakes to Britain today.

Q2 2013 Industry

Government to consider itsrole in improving the publicsperception of the UK oil andgas industry.


Goals:Getting more people to know about theindustry and the contribution it makes tothe nations prosperity should ensure anobjective debate about the UKs energyfuture and could help bring in the best talentto the industry. Going forward, industryand Government need to be more visibleand condent in championing the industrysachievements.


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Status: Indeed there are a number of cross energysector training courses being run. We wish to This strategy is focussed on the UK upstreamencourage and support this cross-fertilisationoil and gas industry. However, the broad oilacross those different energy sectors.and gas sectors inuence is felt throughout

the UK economy. The linkages are particularly It is expected the forthcoming Renewablesapparent with other parts of the energy industrial strategy will cover these synergies insector. The oil and gas industry has the greater depth .skills, knowledge and expertise to develop The overall potential of domestic shale gasits products and services as other industries is still being uncovered. Key uncertaintiesevolve; especially for offshore renewables, remain about how much of UK shale gasshale gas and carbon capture. There is also

is technically recoverable, and whether oran opportunity for the oil and gas industry not the development of these resources isto learn from other advanced engineering economically feasible. Following the removalindustries. of the governments suspension of hydraulicWith over 40 years experience in overcoming fracturing, further exploration and appraisalchallenges of the North Sea, there are many of these resources is set to continue, subjectvaluable transferrable skills and technologies to various extra safeguards. An extensivewhich can help bring forward offshore exploration phase is needed before any shalerenewable projects. In particular there are gas production can begin. The Oil and Gasalready a number of companies with their Industry Council will continue to monitor theroots in the oil and gas industry starting to

situation in line with this strategys aims.diversify into the offshore renewables market. The use of the UKs depleted oil and gas elds This is evident in the Subsea sector with for the permanent storage of CO2 as part ofcompanies establishing a renewables division CCS is a potentially signicant opportunity. Ifand looking at opportunities to widen the all offshore elds currently in production werescope of their offering. used in CCS, together with saline aquifers,Offshore renewables can also build upon this could provide sufcient storage for morethe experience of the oil and gas sector in than 100 years of UK industrial emissions.developing more efcient supply chains, Injecting sequestered CO2 into reservoirswhich are globally competitive and in doing could have a signicant impact on enhancedso generate greater economic benet to

oil recovery. Whilst this technology has not yetthe UK. The stringent safety standards been deployed commercially offshore, such awhich have been developed for the UKCS technology is estimated to have the potentialare transferable, and are being adopted in to recover more than 3 billion barrels fromthe developing offshore renewables sector. ageing UKCS elds 12.

11. Engaging with Other Industries

Aims Supported 2, 3


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Production from the UKCS is an important Goals:feedstock for the UKs downstream industry; Ensure an open dialogue in the areas of skills,with 21% of UK renery crude throughput knowledge and technology transfer thatcoming from the UKCS. The UKs seven main allows the industry to benet from insightsoil reneries processed almost 75 million from other industries.tonnes of crude oil and produced over 76million tonnes of rened products in 2011, To see a step change in the technology andsupporting the employment of an estimated cost of CCS so that it can be deployed to150 thousand people 13. Each of these seven help the UK and OECD reach decarbonisation

reneries is typically estimated to benet the targets for electricity generation.Exchequer by approximately 60 million per For offshore renewable, areas of compatibilityyear through spending on salaries, business might include the installation, operationrates and other services. DECC is leading and maintenance of subsea equipment ina review on these challenges, including the challenging environments. The commonrole of imports, with a view to reporting in late themes include environmental impact, asset2013. integrity and seabed monitoring. Oil and gas

expertise which could have a read acrossare remote structural health and conditionalmonitoring, ICT usage, inspection equipment

and the use of advanced materials.


Projects and responsibilities: Action: Target date: Responsibility:Maintain an open dialogue Q4 2013 Government and industrywith the offshore renewablesector to identify areas ofshared interest and learning.Establish a forum to promote Q3 2013 Governmentgreater awareness ofopportunities between theoffshore wind and oil and gasindustries.


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Status:With around 470 installations, 10 thousandkilometres of pipelines and approximately5 thousand wells to plug and abandon,decommissioning represents a new andexciting business opportunity for Britishcompanies 14. Given the age of the UKCS,this is a sector in which the UK can gain rstmover advantage, as already experiencedwith nuclear decommissioning.

Industry and Government partnership hasalready made great strides to consider thefull scope of this work and how to tackle itefciently and safely.

Goals:Decommission safely, cost effectively andwith regard to the environment, at the righttime and with the right scope. It must also berecognised that safely extending the eld livesof critical hub infrastructure, as describedby PILOTs Infrastructure workgroup, will helpthe viability of nearby exploration and smalleld developments.

12. Decommissioning


Projects and responsibilities: Action: Target date: Responsibility:Develop technical,commercial and regulatoryproposals to bring about

cost efciencies indecommissioning activities.


Develop best practices onmaking an efcient transitionfrom cessation of productionto decommissioning.



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13. Fiscal Regime



Status: Through the establishment of the joint HMT/ Industry Fiscal Forum and through the recentextensions to the eld allowance regime,the Government has demonstrated it iscommitted to a scal regime that encouragesinvestment and innovation in the UKCS,whilst ensuring a fair return for taxpayers. TheIndustry Council will support the discussion ofthe Fiscal Forum as needed.

Over the past two years, the Governmenthas worked closely with industry to develop apackage of measures designed to maximisethe economic production of the UKCS.

These include several new or enhancedeld allowances and giving the industrylong-term certainty on decommissioningtax relief. Industry has warmly welcomedthese measures and the establishment ofthe Oil and Gas Fiscal Forum. Against thisbackground, investment in new and existingelds was a record 11.5 billion in 2012 andis forecast to reach as much as 14 billion in2013. This will ensure that we make the mostof the UKCS in the long term.

A number of major asset trades have beenseen recently several of which have beenpredicated on the expectation of greatercertainty on decommissioning relief. Thechanges to eld allowances for new elds,together with the increase in the rate of theRing Fence Expenditure Supplement from6 to 10 per cent with effect from January2012 which was announced in July 2011,have seen a number of major developments


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proceed, including the Mariner heavy oileld and the Cygnus dry gas eld. Sinceintroducing the browneld allowance,uptake has been strong. Signicant eld lifeextension has been realised, including theredevelopments of Montrose/Arbroath and

Thistle.

Projects and responsibilities: Action: Target date: Responsibility:Maintain an open dialogueand engage in collaborative

studies through the FiscalForum.

Ongoing; (3 meetings p.a.) Government and Industry

Give industry certainty onthe future treatment ofdecommissioning tax relief.

Following Finance Act in2013

Government

Ensure increased certaintyleads to move to useof post-tax security indecommissioning securityarrangements.

2013/14 Industry

Goals:Ensure that the basin maintains the rightscal environment to be an attractive andcompetitive proposition for investors,thereby maintaining integrity standardsand maximising recovery over the comingdecades. Determining the right scalregime will involve collaborative work andstudies conducted through the Fiscal Forum.

Delivery of a Decommissioning Relief

Deed to give businesses certainty over the taxrelief they will receive when decommissioningtheir assets. This will lead to increased assettrades and investment.


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Action: Target date: Responsibility: Transpose EU Safety Directiveinto UK law.

June 2015 Government and Industry

Implement all programmesand initiatives agreed underStep Change in Safety.

Ongoing Step Change in Safety

Map the UK supply chain,including exports, by valueand destination, to determineareas of constraint and

potential opportunities foradditional support.


Provide support for UKbusinesses overseas throughthe UKTIs High ValueOpportunities Programmeand through operatorschampioning the UK supplychain overseas.


Licence holders and major

contractors to share selectioncriteria with Government priorto awarding a major contract.


Commission work toaddress areas impacting onthe competitiveness of UKfabricators.


Promote Oil and GasIndustry participation inthe Government-funded

Advanced ManufacturingSupply Chain Initiative(AMSCI).


Annex A: Aggregation of projects andresponsibilities


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Conduct a gap analysis ofcounterparts in other oil andgas producing countries andtake forward best practices.


Extend the SCCoP to requirethat capable UK-basedbusinesses are given fullconsideration when compilingthe list of approved bidders.


Improve access to

infrastructure:- Receive report of ndings- Implementation of agreedactions.

Q2 2013

Q4 2014


Increase oil recovery:- Receive workgrouprecommendations- Implementation of agreedactions.

Q2 2013

Q4 2014


Enhance oil recovery:- Receive workgrouprecommendations- Implementation of agreedactions- Review potential use forCCS CO2 in EOR.

Q2 2013Q4 2014


Improve technology uptakeby holding a technologyShare Fair event that links

industrial demands withtechnology suppliers.


Action: Target date: Responsibility:


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Improve exploration success- Receive recommendationsfrom Exploration Taskforce- Implementation of agreedactions.

Q3 2013

Q4 2014


Improving Workforce skills- Create a one-stop-shopinformation gateway to attractpeople into the industry- Broaden the number ofmodern apprenticeshipdisciplines available as partof the Upstream Oil and Gas

Technician Training Schemeapprenticeship scheme,- Form a partnership withthe Military for people withrelevant transferable skills.


Raise awareness of thenancial instruments availableto the oil and gas industrythrough the organisation of a

joint industry conference.


Government to engage withindustry on the wide range ofGovernment nance initiativesthat are currently in place.


Help shape the role of theGovernments Business Bank.

Q3 2013 Industry

Review supply chain positionin relation to performancebonds and make appropriaterecommendations.



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Study the specic issueof how to speed uptechnology implementationand understand what bestpractices can be taken fromNorway.


Develop and deliver afocussed technology strategythat anchors key gamechanging technologyinnovations as dened bythe PILOT initiatives andspecic geographical andtechnological target areas.


Establish more effective linksbetween industry demandfor new technology and theinnovation community byholding an annual technologyshare fair.


Reprioritise the ITFs focustoward the UKCS.


More effective usage ofstewardship data to increaserecovery factors across eldsthat are underperformingrelative to their peer group.


Establish a national centre ofexcellence for technology.

Q1 2014 Industry

Collect data on the industry

skills shortage and performskills gap analysis.




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Establish a nationalprogramme to retrain ex-military personnel and fromother industries with therelevant transferable skills toenable them to be redeployedin the oil and gas industry.


Map the work being done byBIS to address STEM uptakeissues.


Industry to decide whetherit is to become an activeparticipant in the See InsideManufacturing programme.


Encourage gender diversity inthe industry by encouragingwomen to take up STEMsubjects, including a specicevent at Offshore Europe toattract women to the sector.


Government and Industry towork within the academicenvironment to stimulatestudent demand forengineering careers.


A pilot project will soonbe underway to improveawareness and understandingof the contribution that theindustry makes to Britaintoday.

Q2 2013 Industry



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Government to consider itsrole in improving the publicsperception of the UK oil andgas industry.


Maintain an open dialoguewith the offshore renewablesector to identify areas ofshared interest and learning.

Q4 2013 Government and industry

Develop technical,commercial and regulatory

proposals to bring aboutcost efciencies indecommissioning activities.


Develop best practices onmaking an efcient transitionfrom cessation of productionto decommissioning.


Maintain an open dialogueand engage in collaborativestudies through the Fiscal

Forum.

Ongoing; (3 meetings p.a.) Government (HM Treasury)and Industry

Give industry certainty onthe future treatment ofdecommissioning tax relief.

Following Finance Act in 2013 Government

Ensure increased certaintyleads to move to useof post-tax security indecommissioning securityarrangements.

2013/14 Industry

Establish a forum to promotegreater awareness ofopportunities between theoffshore wind and oil and gasindustries.

Q3 2013 Government



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The industry is UK-wide with key clusters in Aberdeen, London and the north east andeast of England.

Whilst most of the gross value added (GVA)is concentrated in the operators extractionof oil and gas, the supply chain services arean integral part of the industrys success:operators in the UKCS are dependent uponthe vibrancy of the domestic supply chainand vice versa. As shown in the diagram, theUK supply chain is deep, varied and activity islinked to all parts of a elds life cycle.

Annex B: SWO Analysis of the oil and gasindustry

Figure 1: The oil and gas supply chain is widespreadacross the UK


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operational, commercial and contractualinnovation and as a result, is well positionedacross the value chain. The supply chain

achieved revenues of 27 billion in 2011 3 and is internationally recognised as a centreof excellence in project management, majorcontracting, design engineering, assetand operational management, design andmanufacturing of advanced equipment,research and development, training andeducation and professional and nancialservices.

Specically, the UK is acknowledged ashaving signicant strengths in the followingareas:

Safety;

Subsea engineering;

High pressure, high temperature (HPHT)eld developments;

Oil and gas process machinery,equipment and technology;

Deep water oil and gas developments; Integrated services for the operation and

maintenance of elds;

Late life operation of mature elds;

Figure 2 also gives some indication as to therelative strengths (green) and weaknesses(amber) of the UK supply chain. The whiteboxes suggest the area to be neither astrength nor a weakness. Due to a lack ofavailable data, strengths were determinedas areas where the UK has critical mass andworld-leading capability. Similarly, areas ofweakness were dened as having a relativelylow proportion of UK businesses and wherework for UKCS elds tends to be awarded tonon-UK headquartered companies.

Robust data on exports from the UK supplychain and on the proportion of UK supply

chain content in UKCS projects are neededto make better informed policy to assist theUK oil and gas supply chain going forward.

The ndings will be reviewed annually by theOil and Gas Industry Council.

This section outlines the general strengthsand weaknesses of the UK oil and gasindustrys supply chain, identifying some ofthe opportunities and threats facing it.

Strengths The UKs oil and gas supply chain has beenover 40 years in the making. Throughoutits evolution, the UK supply chain hasdemonstrated an aptitude for technical,

Figure 2: Overview of the relationship between UKsupply chain and operator activities


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Training and education;

Legal, nancial and insurance services.

WeaknessesHigh cost baseRevenues in the oil eld services haveincreased year-on-year since 2008 but protshave not always mirrored this trend. Onepotential explanation is the rise in costs in theindustry15; the oil and gas industry has thehighest average cost per employee acrossthe industrial sectors.

This high cost base is starting to be felt inthe supply chain, particularly in the heavyfabrication subsector where many recentcapitally intensive projects have beenawarded overseas instead of to UK yards.

The main reason cited in one-one meetingswas cost competitiveness.

Industry collaborationHigh activity levels can lead to anoverheating of the UK supply chain andincreased demand for cost-competitiveoptions overseas. Collaboration would workto smooth out demand and supply.

Technology implementationIt is suggested that there is a raceto be second in terms of technology

implementation in the UKCS, with end userswanting to implement technology with aproven benet, but not wanting to be the rstto trial a new technology in situ. Anecdotalevidence from discussions with the industryhas suggested that some SMEs go out ofbusiness before their product is trialled.

AberdeenWhile the strengths of the sector are UKwide, Aberdeen has established itself as a

global hub for oil and gas expertise. Thishas happened in spite of, not because of, itsinfrastructure. From a small airport through totrafc congestion and limited housing stock,

Aberdeen has struggled to keep up with thedemands of the thriving oil and gas sector.

Aberdeen City Council is fully aware of theseissues and keen to tackle them with industry.Previous investments in industry parks andsupport for new build facilities have helpedgive Aberdeen an enviable employmentrecord. The City Council is now takingforward work on the western peripheral routewhich will ease congestion. The new harbourin Nigg Bay will be of particular value to thesector. The airport is up for sale, followingthe Competition Authoritys BAA ruling. Newowners will be encouraged to invest in itsfacilities to make it a true international airport.

Aberdeen City Council is in discussionswith Infrastructure UK regarding the use ofan UK guarantee to help raise nance forinfrastructure investment.

Opportunities for the UK supply chaini) Domestic

There is a large enough resource base tofeed supply chain eld development andoperations to well beyond 2050: over 41billion barrels of oil equivalent have beenrecovered from the UK, but a further recoveryof 15-24 billion barrels could be achieved withfurther new investment. 4

High interest in licensing roundsFollowing high levels of interest in successiveUK offshore licensing rounds, the number ofrm commitments for shooting, processingand interpreting seismic on the UKCS overthe next four years is high, especially for3D seismic. Improvements in mapping andtechnology could increase recovery. Thisincrease in demand is due in part to theextension of the Small Field Allowance (SFA),which improved the expected monetary valueof exploration drilling in mature regions of theUKCS, making drilling more attractive nowcompared to after Budget 2011.


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New investment will come in part from fostering strongerNew technology and changes to the scal links between the needs of the industry withcode have helped lead to recent, sizeable academia and commercial innovators.investments in large projects such as BPs Future sectors4.5 billion Clair Ridge project and Statoils Decommissioning will become a signicant4bn+ investment in the heavy oil Mariner part of the oil eld service value chain, ifeld. These are the largest investments in operators and the supply chain collaborate tothe UKCS for more than a decade. Field minimise bottlenecks of activity. In future, otherallowances in the west of Shetland region sectors could come into focus; carbon capturehave lead to the development of elds in and storage opportunities could use oil andthis area; opening up the frontier for smaller gas industry transport expertise and storagedevelopments in the region in future. The SFA infrastructure. Shale gas in the UK could drawcontinues to help the development of many on the well service contractor community inother smaller developments. Aberdeen. Offshore wind and marine energyExisting elds offer signicant potential opportunities for

Approximately 50% of xed offshore the UK oil and gas offshore and supply chainplatforms are now operating beyond their experience and expertise. In particular theoriginal design life16, with older facilities subsea sector which is already straddling bothneeding increased amounts of maintenance sectors and also in relation to health and safetyrelated activity. The Macondo incident has and training.also lead to an increase in asset integrity

The forthcoming Offshore Wind Industrialactivity. The introduction of a brown- Strategy will explore these areas in greatereld allowance and work on securing depth.decommissioning liabilities will both lead toextensions in eld life, through increased ii) Internationalbrown-eld work and asset trades, and will The major oil and gas rms are nding largeralso result in increased asset maintenance and more protable elds in emerging regionswork. elsewhere this is an opportunity for UK

supply chain companies who have proven Technology products and services as well as establishedSignicant implementation of increased oil relationships with those exploring overseas

recovery (IOR) and enhanced oil recovery elds. Supply chain companies indicated they(EOR) techniques and technologies could were most likely to enter a new market if theyimprove production within the UKCS by were specically introduced by a previousup to 4% over the next 35 years 17. Future business partner.opportunities to deliver advances in technology


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exited the UK citing better explorationprospects elsewhere.

Accessing nanceCurrently smaller supply chain companiescompeting for large contracts are asked topost a security bond to protect the operatoror primary contractor from project overrunsor low quality product. This is reported as abarrier to growth for some UK supply chaincompanies.

Ageing workforce demographics and itsimplications for skillsDespite a tight UK oil and gas labour marketwhere the majority of the industrys workfaceare older than the UK average, and a UKlabour market where spare capacity isestimated at over 3% 20, companies havetended to bid up the price of labour currentlyavailable instead of investing the time infully training a new entry level employee.

This short term approach to tackling theissue increases the costs of operating inthe UKCS. Anecdotal evidence suggeststhat widespread use of subcontracting andlimited company status is exacerbating theseimpacts.

Threats to the UK supply chain

Anything that threatens the willingness ofoperators to do business in the UK willindirectly threaten the supply chain.

Declining production The UKCS reached its peak in terms of oiland gas production in 1999. Productionin recent years is currently less than 50%of its historic peak 18. Any increases inUK production ought to be seen against

a baseline of long term decline. Indeed,production issues in the North Sea weretouted as the principal factor behind the UKsnegative GDP growth in Q4 2012. Productionis the lifeblood of the oil eld service sectorand current decline rates need to be arrested.

The challenge is to boost current levels ofproduction by working on increased recoverytechniques, asset integrity and successfulwell interventions; developing this short-term

threat into a longer term opportunity for thesupply chain.

Declining exploration drilling and successrates

Although the number of exploration wellsstarted in 2012 represented a 40% increaseon 2011, the year with the fewest wells drilledsince 1965 19, only two small discoveries weremade; leaving exploration success rates at anall-time low. Supply chain companies with a

main focus in exploration and drilling servicesmay have their skills and services drawnoutside of the UK to other, more prospectiveareas. One operator, Tullow Oil, recently


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The lack of specialised engineers hasbeen recognised by the Migration AdvisoryCommittee in its most recent report onshortages in some professions. Thisview has been reinforced by reports fromindustry bodies such as OPITO that suggestexperienced engineering posts are the mostdifcult to ll.

Outlook

If industry and Government are successful in

maximising the domestic opportunities andminimising the threats listed here, there wouldbe a measurable impact on UK oil and gasoutput which would be of tangible benet toUK GDP, employment and taxes.



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Purpose: The Oil and Gas Industry Council provides a forum where current and arising issues for the oiland gas supply chain can be discussed with BIS/DECC and to advise the UK Government onthe development and delivery of a sector specic strategy for oil and gas as part of the UKsIndustrial Strategy. If there is a specic topic of relevance on the agenda the Chairman mayagree to the inclusion of additional representatives to attend the meeting

Chairman: Gordon Ballard, Chairman and Country Manager, Schlumberger

John Pearson, Managing Director, Natural Resources Europe and West Africa, AMEC

Patrick Phelan, Managing Director, Aquaterra Energy

Neil Kirkbride, Managing Director, BEL ValvesNigel Lees, Operations Director, BIS Salamis

Rod Christie, President of GE Energy for Central & Eastern Europe, Russia and CIS, GEEnergy

Jack Winton, Senior Vice President, Operations, KCA Deutag

Steve Nicol, Chief Executive Ofcer, Red Spider Technology

Trevor Garlick, Regional President, BP

James Edens, Vice President & Managing Director, CNR International UK Limited

Nigel Hares, Chief Operating Ofcer, EnQuest

Nigel Wilson, Regional Business Unit Manager, Premier Oil

Glen Cayley, Vice President - Technical, Shell Upstream International Europe

Morten Ruud, Executive Vice President for Projects, Statoil

Malcolm Webb, Chief Executive, Oil & Gas UK

Stephen Marcos Jones, Business Development Director, Oil & Gas UK.

ANNEX C: Te Oil and Gas Industry Council


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ANNEX D: Key Website Addresses

BIS: The Department for Business, Innovation & Skills (BIS) is the department for economicgrowth. The department invests in skills and education to promote trade, boost innovationand help people to start and grow a business. BIS also protects consumers and reduces theimpact of regulation.https://www.gov.uk/government/organisations/department-for-business-innovation-skillsUKTI: UK Trade & Investment (UKTI) works with UK-based businesses to ensure theirsuccess in international markets, and encourage the best overseas companies to look to theUK as their global partner of choice.http://www.ukti.gov.uk/home.htmlDECC: The Department of Energy & Climate Change (DECC) works to make sure the UK has

secure, clean, affordable energy supplies and promote international action to mitigate climatechange.https://www.gov.uk/government/organisations/department-of-energy-climate-changeProject Pathnder: https://www.gov.uk/oil-and-gas-project-pathnderHMT: Her Majestys Treasury (commonly known as HM Treasury) is the United Kingdomseconomics and nance ministry.http://www.hm-treasury.gov.uk/ Enterprise Zones: Enterprise Zones are areas around the country that support both new andexpanding businesses by offering incentives.

http://enterprisezones.communities.gov.uk/ Natural Environment Research Council: NERC is the UKs main agency for funding andmanaging research, training and knowledge exchange in the environmental sciences.http://www.nerc.ac.uk/ Research Councils UK: RCUK are responsible for investing public money in research in theUK to advance knowledge and generate new ideas which lead to a productive economy,healthy society and contribute to a sustainable world.http://www.rcuk.ac.uk/Pages/Home.aspx

Technology Strategy Board (TSB): The TSBs role is to stimulate technology-enabledinnovation in the areas which offer the greatest scope for boosting UK growth andproductivity. It also advises Government on how to remove barriers to innovation andaccelerate the exploitation of new technologies.http://www.innovateuk.org/


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Scottish Council for Development and Industry: The SCDI is an independent membershipnetwork, which strengthens Scotlands competitiveness by inuencing Government policiesto encourage sustainable economic prosperity. It is a broad-based economic developmentorganisation, with membership drawn from Scottish business, trades unions, public agencies,educational institutions, local authorities, and the voluntary sector.

http://www.scdi.org.uk/

Scottish Enterprise: Identify and exploit the opportunities for economic growth bysupporting Scottish companies to compete, helping to build globally competitive sectors,attracting new investment and creating a world-class business environment.

http://www.scottish-enterprise.com/

Scottish Government Oil and Gas Strategy:

http://www.scottish-enterprise.com/~/media/SE/Resources/Documents/MNO/Oil-and-Gas-strategy-2012-2020.pdf

Aberdeen City Council:

http://www.aberdeencity.gov.uk/home/home.asp

Association of British Independent Oil Exploration Companies (BRINDEX): The Association ofBritish Independent Oil Exploration Companies (BRINDEX) seeks to promote the role playedby British independent exploration and production (E&P) companies in maintaining a powerful

and effective UK based oil and gas industry. By increasing awareness of the independentsachievements in developing oil and gas reserves on the UK Continental Shelf (UKCS), andincreasingly elsewhere in the world, we aim to demonstrate our vital contribution to both theindustry and the local economy.

http://www.brindex.co.uk/

British Chemical Engineering Contractors Association (BCECA): BCECA is the tradeassociation representing the principal companies in the UK that provide engineering,procurement, construction and project management services to the process industries.

http://bceca.co.uk/


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British Rig Owners Association (BROA): Since it was established in 1982, BROA has beendedicated to promoting technical discussion between the owners and operators of mobileoffshore units, and representing their interests. The focus of the membership and thereforeBROA has expanded beyond the oil and gas industry to include offshore renewable activityas well.

http://www.broa.org/

Caters Offshore Trade Association (COTA): COTAs main priority is maintaining a collectivefocus on safety and service delivery for the benet of our customers and our people. Togetherwe employ over 3,000 employees, including chefs, bakers, stewards and administrative teammembers.

http://www.cota.org.uk/ DECOM NORTH SEA: Decom North Sea was set up to tackle the main areas of weaknessand the bottlenecks which are inhibiting UK decommissioning supply-chain capability.

http://www.decomnorthsea.com/

East of England Energy Group (EEEGR): EEEGR is the industry association for energy in theEast of England, representing over 350 members across the supply chain.

http://www.eeegr.com/

Emergency Response & Rescue Vessel Association (ERRVA): The Association represents the

owners and operators of the UK Continental Shelf Emergency Response and Rescue Vessels(ERRVs).

http://www.errva.org.uk/home.php

Energy Industries Council: The EIC is the leading Trade Association providing dedicatedservices to help members understand, identify and pursue business opportunities globally.Established in 1943, the EIC is a not-for-prot organisation with a membership of over 670UK-registered companies who deliver goods and services to the energy industries worldwide.

http://www.the-eic.com/

Energy Institute: The Energy Institute (EI) is the professional body for the energy industrydelivering good practice and professionalism across the depth and breadth of the sector.http://www.energyinst.org/home


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Energy North: Energy North is a not-for-prot trade group of over 160 members in the Oil& Gas, Renewable Energy and Nuclear markets. Our area of operation covers Aberdeen,Orkney & Shetland, Caithness, Ross-shire, Inverness, Moray, Argyll, and the Outer Hebrides.

This conrms the Energy North as the voice of Energy in the North of Scotland and Islands.

http://www.energynorth.co.uk/Home.aspx

Engineering Construction Industry Training Board (ECITB): The ECITB providesprofessional advice, information, skills development and qualications to help individualswithin engineering construction succeed in their chosen careers.

http://www.ecitb.org.uk/

Engineering and Physical Sciences Research Council: EPSRC is the main UK governmentagency for funding research and training in engineering and the physical sciences, investingmore than 800 million a year in a broad range of subjects from mathematics to materialsscience, and from information technology to structural engineering.

http://www.epsrc.ac.uk/Pages/default.aspx

FPAL: FPAL works to identify, qualify, evaluate, and monitor suppliers on behalf of itspurchasing members.

http://www.achilles.com/en/FPAL/

Industry Technology Facilitator (ITF): Key objectives are to identify technology needs, foster

innovation and facilitate the development and implementation of new technologies. To date,ITF has been responsible in launching more than 180 new collaborative and revolutionary jointindustry projects (JIPs), with a portfolio of around 37 ongoing projects linked to 16 milliondirect member investment.

http://www.itfenergy.com/

International Association of Drilling Contractors (IADC): IADCs mission is to advance drillingand completion technology; improve industry health, safety, environmental and trainingpractices; and champion sensible regulations and legislation which facilitate safe and efcientdrilling.

http://www.iadc.org/


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International Marine Contractors Association (IMCA): IMCA works through and on behalf ofits members world-wide promoting offshore safety, addressing technical matters and on avariety of other issues.

http://www.imca-int.com/

NOF Energy: Business development organisation working on behalf of companies within theoil, gas, nuclear, and offshore renewables sectors.

http://www.nofenergy.co.uk/

Oil & Gas UK: Oil & Gas UK is the leading representative body for the UK offshore oil andgas industry. It is a not-for-prot organisation, established in April 2007 but with a pedigree

stretching back over 30 years. Membership is open to all companies active in the UKcontinental shelf, from super majors to large contractor businesses and from independent oilcompanies to SMEs working in the supply chain.

http://www.oilandgasuk.co.uk/

Oil & Gas Independents Association (OGIA):

http://www.ogia.co.uk/

Offshore Contractors Association: The Offshore Contractors Association is the leadrepresentative body for contractors. Based in Aberdeen, the organisation looks after theinterests of more than 70 companies involved in a range of activities including mechanical,

electrical and allied services, construction, modications and maintenance work, design andproject engineering, fabrication and decommissioning.

http://www.aberdeenrenewables.com/members/complete-a-z-index/offshore-contractors-association-1/

OPITO: OPITO is the industrys focal point for skills, training and workforce development. Itis a self-sustaining, employer and trade union led organisation committed to developing andsustaining a safe, skilled and effective workforce now and in the future. This is achieved byworking in collaboration with: industry employers, learning & training providers, education &academia and partnership organisations.

http://www.opito.com/uk/ Subsea UK: Subsea UK is the industry body and focal point for the entire British subseaindustry and aims to increase business opportunities at home and abroad for the sector.

http://www.subseauk.com/


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1DECC

https://www.gov.uk/government/uploads/system/uploads/attachment_data/le/65717/6660-updated-emissions-projections-october-2012.pdf 2 Oil & Gas UK Activity Survey 2013

http://www.oilandgasuk.co.uk/cmsles/modules/publications/pdfs/EC037.pdf 3Ernst & Young Review of the UK oileld Services Industry 2012

http://www.ey.com/Publication/vwLUAssets/Review_of_the_UK_oileld_services_industry_2012/$FILE/EY_Review_of_the_UK_oileld_services_industry_2012.pdf 4 Oil & Gas UK Economic Report 2012

http://www.oilandgasuk.co.uk/cmsles/modules/publications/pdfs/EC029.pdf 5 DECC

https://www.gov.uk/oil-and-gas-uk-eld-data#ukcs-income-and-expenditure6 Step Change in Safety

http://www.stepchangeinsafety.net/about/strategicplan.cfm7 SCDI

http://www.scdi.org.uk/sr/Docs/Survey_of_International_Activity_in_the_Oil_and_Gas_

Sector_2010-11.pdf 8 Scottish Oil and Gas Strategy

http://www.scottish-enterprise.com/~/media/SE/Resources/Documents/MNO/Oil-and-Gas-strategy-2012-2020.pdf 9 Norwegian Business School

Knowledge based Oil and Gas Industry Research Report 3/2011 BI10 From one-on-one discussions with industry representatives.11 DECC

https://www.gov.uk/government/uploads/system/uploads/attachment_data/le/65751/3939-energy-trends-section-1-total-energy.pdf

ANNEX E: Sources


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12 CCS Association

www.ccsassociatio