The announcement last week that £504million of public sector money will be invested in support of the Aberdeen City Region Deal is very welcome news for the north-east of Scotland.
Combined with private sector investment, it is estimated that the local economy could benefit from well over £1.2billion over the next few years. At a time when the oil and gas industry is under severe strain and the region is feeling the negative economic impact, it is great to see some good news coming to this part of the world and this industry.
Although details are still to be finalised, some £210 million of the governments’ contribution is earmarked for innovation and technology. The funding will help to diversify the local economy by supporting innovation in life sciences, food and drink, big data and oil and gas.
Out of the £210million of public sector funding announced, the lion’s share will be available to establish a new world-class international Oil and Gas Technology Centre (OGTC) in support of the oil and gas industry in the north-east and across the whole of the UK. The OGTC will have a key role to play in terms of maximising the economic recovery from the UK, anchoring the supply chain for the longer term and ensuring the retention of high value jobs in the UK.
Throughout its history, the North Sea has had a successful track record of innovation and technology deployment.
However, as the basin matures and has to deal with tough cost and efficiency challenges, there is a real need for a step change in the application and development of new technology as well as new ways of working. Aligning closely with the industry, universities, trade associations and the Oil and Gas Authority, one of the first priorities of the new OGTC is to establish a number of ‘solution centres’.
This is not about having a big shiny building, but utilising existing facilities to support the industry in delivering practical solutions for challenges such as reducing the cost of drilling a well or finding new and more cost effective ways of developing smaller and more marginal fields.
This is a new and different approach for our industry and is expected to leverage capabilities from across the UK and beyond.
The expectation is that a number of these OGTC managed solution centres will be created in the next 12 months, with initial delivery expected from 2017 onwards. In addition, and working closely with universities, the OGTC will also be looking to establish and enhance world class research capabilities, develop new test facilities and support the innovator community to move technology and innovation to market more quickly.
The Aberdeen City Region Deal has created a real opportunity to help to transition Aberdeen and the UK oil and gas industry as a whole, from an oil and gas operational base to a major, international centre for offshore technology and innovation.
Building on our track record to date and the funding made available last week, we have a unique opportunity to establish a world class Oil and Gas Technology Centre. The key to unlocking this is now in our own hands.
Professor Paul de Leeuw is director of the Robert Gordon University’s Oil and Gas Institute
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