British Consul Karen Bell said there is “massive opportunity” for companies to take advantage of the lower oil price and bid for new business with firms.
The career diplomat, who took up her most recent posting last June, said it is “far easier” to get a meeting with a procurement director when the price of oil is $40 a barrel compared to $100.
With postings in oil-rich hubs such as Saudi Arabia and Nigeria already on her resume, the freshly-appointed diplomat with responsibilities in five states – Texas, Arkansas, Oklahoma, New Mexico and Louisiana – knows all too well the impact energy prices can have.
But she said energy hot spots such as Houston and Aberdeen have many opportunities to gain from lower global price of crude despite its current challenges.
She said:“There’s no getting away from the fact capex budgets are being slashed and projects cancelled: that makes for challenging times, but the opportunities that the companies we see in Houston are looking for ways in order to continue to bear down on costs and innovative technologies and an understanding of better ways to do things are a big part of that.
“Relationships with existing suppliers have been under pressure I think it’s fair to say. The majors are passing on to the service companies the cost reductions they are experiencing and if existing suppliers are not able to respond in a just way with their pricing then people will start looking for new contacts. This is where there is a massive opportunity for companies with the capability like we see in Aberdeen.
“It is much easier at a $40 barrel to get a meeting with a procurement director than it ever was when the price was over $100. The trick really and our advice is, if you can get that meeting – make the most of it. Turn up to talk about what it is really you can bring to that business and how it’s going to help them with their challenge around cost.
“If you’ve got a compelling proposition then this is a good time to be setting out your stall.”
Bell visited Aberdeen earlier this month for the fourth annual Aberdeen-Houston gateway which brings together businesses from the US and Aberdeen to see what opportunities they can offer.
With Houston’s important links with Aberdeen, the most recent visit by the diplomat marked her third time in the granite city since taking up her posting.
She described the current mood in Houston as “stoical” where there is a sense with the current down cycle that “this too shall pass”.
Bell said:”While you can’t underestimate on a personal level the impact job losses have had on individuals and their families I think at the corporate level companies are really just biding their time so the focus is on retaining the talent and capability that they need for when the moment’s right to come back into the market.
“I have to say that I’ve heard a number of people over the past few weeks, particularly earlier this month as the oil price was coming back to $40 and above just starting to suggest that maybe the first green shoots are starting to emerge.
“The other thing I would say is, in much the same way as here in Aberdeen people are starting to think about economic diversity, Houston is a story that’s more than just about oil and gas. There are a number of other economic segments that are continuing to perform very, very well.
“The healthcare sector is a stand out example of that. Houston is home to world’s largest medical centre with an astonishing number of research institutions there. There’s definitely a story of economic diversification which has been borne of the previous cyclical downturns in the energy price.
“The hospitality industry has also been gaining jobs, so last year in terms of Houston itself, we’ve been in a city that has traditionally been adding jobs by the tens of thousands every year.
“Last year was still a year of net growth, which is not to underestimate the impact the oil price downturn has had on jobs growth but I think there is still a real sense of stoicism but actually there’s a sense of more generally, optimism, in the local economy. There’s no reason not for people to come and take a look.”
Looking towards Aberdeen, Bell said one word she keeps on hearing is “innovation” which is something British diplomats are keen to promote from the UK to the rest of the world.
She added: “I think there is a shared appreciation in Aberdeen and Houston that we need to keep thinking in both energy hubs about what is going to make our economies continue to be competitive and to provide jobs in growth.”
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