ROVworld Subsea Information

Life after oil
Date: Friday, September 14, 2007 @ 16:00:00 EDT

Life after oilLast week, Aberdeen could lay reasonable claim to be the oil capital of the world as it hosted 35,000 delegates at the Offshore conference. But, as North Sea stocks decline, the Granite City is looking to cover new ground.

Aberdeen has long proclaimed itself the oil and gas capital of Europe. That assertion was reinforced last week as 35,000 delegates 3000 more than in 2005 from more than 100 countries flocked to the Granite City for the Offshore Europe oil and gas conference.

From Tuesday through to Friday, Aberdeen could have got away with calling itself the oil capital of the world.

But that would perhaps have been to detract from the work that is under way to reposition Aberdeen as the energy capital of Europe.

For it was evident at the conference that substantial progress has been made since Scotland's oil players sat down five or six years ago to figure out which direction to take, given that it had become clear that North Sea oil and gas was running out.

Perhaps most striking, though, was the evidence of the measures that have been taken to address an issue that affects the industry globally: the shortage of skilled workers and recruitment difficulties.

On Wednesday, day two of the conference, skills and training organisation Opito launched a media campaign designed to attract more young people to the offshore oil and gas industry.

Opito invited along explorer and TV presenter Bear Grylls the youngest Briton to climb Everest to spread that word that the "unique benefits of an offshore career prove that you don't need to be braving the Amazon to enjoy an exciting lifestyle".

A six-figure sum has been invested in this campaign that will target young people between the ages of 16 and 25 living in Scotland's central belt and the North of England.

Opito's modern apprentice scheme has already proved phenomenally successful. The scheme was launched six years ago after a survey showed that the average age of workers in the oil industry was 50. Since then GBP52 million has been invested by the industry.

David Doig, chief executive of Opito said: "That figure gives you some idea about how serious the industry is about dealing with recruitment issues. We will take on between 100 and 130 modern apprentices every year. That is a huge contribution." The success of the scheme can be measured by the results. Over the threeand-a-half years the scheme has been running, 96-per cent of the apprentices have graduated.

"That is a tremendous record," said Doig.

The attrition rate is less than 10-per cent.

That compares with a rate of 45-per cent on other modern apprenticeship schemes.

And the most recent call for applicants was oversubscribed 15 times.

BP production engineer Gordon Provan, one of the first people to go through the apprenticeship scheme, also extolled the virtues of an offshore career.

"After five years, I've been able to buy a house, drive a car that I want to drive and take lots of holidays," Provan said.

According to Doig, the average salary of apprentices leaving Opito and being taken on by an operator is currently GBP47,000. Senior offshore managers earn about GBP100,000.

A recent survey showed that, thanks to the scheme, the average age for the total UK continental shelf workforce had fallen to 41 years. The average was 43 years for offshore workers. However, the under-24 and 30-40 age groups remain under-represented.

The success of the scheme gives Doig, who has worked in the industry for more than 25 years, some confidence about Aberdeen's future.

"I am optimistic, but it's a challenge," he said. "People are going to have to be serious about what they are going to do in Aberdeen and make some commitments because it's not a God-given right [that Aberdeen will remain an energy capital]." He continued: "The long-term key for Aberdeen is for it to be recognised as an international hub with high level skills and exporting those will be the key."

In this respect, Opito has followed its own advice. In 2000, it did very little overseas. Now, it exports Opito standards, qualifications and training to 23 countries. "We've done that in a very short period of time, " said Doig.

Malcolm Webb of Oil & Gas UK agrees that exporting skills will be key to Aberdeen's future.

Webb said: "The UK supply chain of contractors and engineering companies, their turnover in the UK is about GBP11 billion a year. Last year they exported GBP4bn worth of goods and services. That side of their business is growing at an almost exponential rate.

And an awful lot of that is based in Aberdeen. So hopefully the two [the supply chain and Aberdeen] are going to grow in tandem." Aberdeen's most forward-looking companies already appreciate this. One such firm is Walker Technical Resources (WTR). In the early 1990s, WTR developed a temporary repair product that allowed planned pipeline changeouts to take place. Since then it has introduced new products that allow the pipelines to be repaired without breaking the pipeline. These repairs can be guaranteed for a lifetime of 20 years.

Now the firm is embarking on an international expansion programme and has already won contracts in Canada, Nigeria and Qatar. It also has operations in Khazakstan.

Offshore Europe also provided the opportunity for the backers of energy centres to provide an update on the progress being made. Currently, plans are afoot for three such centres in the UK.

The first is an Energy Technologies Institute. A consortium of universities within Scotland is bidding to host the institute in competition with four other groups of universities around the UK.

The host will be the base for the institute's director and support staff and it is expected to develop into a strategic focus for low-carbon technology innovation in the UK and for international collaboration. However, the announcement in July that Scotland's bid to host the institute would be based around Strathclyde University was a setback for Aberdeen city and shire. Local energy companies, universities and public sector bodies had made a "strong case" for hub to be based in the northeast.

However, momentum for an International Energy Academy is gathering force. Dr Ian Heywood, the director of Skills and Learning at Scottish Enterprise Grampian, used Offshore Europe to outline his vision for the academy, which is intended to pull together everyone in the industry to find out what their skills needs for the future are.

A training academy will form one part of the proposed energy academy.

There will also be a skills research centre that will work with industry to analyse the training needed by the sector to ensure continued growth in the future.

The third part of the academy will be a centre of excellence that promotes the region's strengths as a world leader in people development for the energy industry and inspires people to join the industry.

However, it has not yet been decided what physical form the Academy will take whether it will be located in one fixed building or at different locations round Scotland.

Heywood said: "Over the consultation period, it became clear that the idea of a single location for the IEA did not play to the strengths of the diversity of provision across a range of public and private sector organisations across Scotland and the idea grew of having bases at specific locations across the country where there are zones of expertise such as research centres or company groupings." To take the energy academy beyond the concept stage, Heywood is looking for the support of industry and the private sector.

"I'd love the Energy Academy to be led by industry," he said.

Heywood aims now to pull together some of the skills and training element of the Academy within a couple of year and to get the project up and running in its full form in five years.

The third scheme, for an Energy Futures Centre, is at a more advanced stage. At the end of August, Aberdeen City Council and Aberdeen Renewable Energy Group (AREG) published their plans for "futuristic" building to house centre on Aberdeen's seafront.

The centre is intended to bring together Aberdeen city and shire's world-class energy development expertise in oil and gas and renewables.

It is intended that the centre will perform a mixed role as a science centre, a location for key energy organisations and as a public space to promote, educate and entertain on key energy issues and energy science.

First Minister Alex Salmond said in his opening speech to the conference: "I want Scotland to become a global leader in developing solutions to the challenge of climate change. I want Scotland to stay ahead of the game by becoming the pre-eminent location for clean energy research and development for Europe. I want Scotland to become the green energy capital for Europe." And Offshore Europe proved that Scotland's players are taking the initiative to reach these goals.

© 2007 Financial Times Ltd.

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