Tomorrow, I will host a meeting of the leading players in oil and gas – who will come together to develop a raft of new measures designed, not just to sustain business in the North Sea, but also future-proof the North-east economy for generations to come.
Clearly, there is a lot of doom and gloom around the state of the sector, but rest assured, there is still plenty of life in the North Sea yet.
The summit tomorrow is a small, round table discussion involving all the key stakeholders. We will review the steps agreed at last year’s event and consider new actions.
We are now working against the backdrop of the £250 million City Region Deal – which could leverage in an estimated further investment of £550 million. That’s an £800 million resource we didn’t have when we last met in 2015.
A crucial part of our recovery strategy is diversification and that will take many different forms. From energy to exploration, which has been a key staple of our economy, to subsea and new technology.
We must look at how we apply these to the wider energy industry such as renewables and hydrogen, but also how these new technologies could benefit other sectors.
The expertise which resides in the North-east is in demand all over the world, which means we can take our innovation and advanced technology and export it to basins abroad.
We have a growing food, drink and agricultural base and are planning a major step-change in our tourism sector.
Aberdeen is a city of 227,000 people, with a vibrant education sector which includes two universities and a further education college. This means that at any given time there are almost 60,000 young people studying here. We must retain the brightest minds and ensure they play a leading role in shaping our brave, new economic world.
We also want to encourage students and graduates to be entrepreneurial and join the fast-expanding start-up scene in the region.
Significant investment is needed, of course, but it must be evenly distributed, benefitting not just the oil industry and the creation of new jobs, but also encouraging a wider base of skills.
We are keenly aware that Aberdeen needs an effective infrastructure for a more sustainable future that’s not wholly dependent on oil.
It must also include investment in food production and life sciences, not to mention improvement of transport and educational outcomes for the next generation of North-east workers
This important gathering will give me the opportunity to check in with Oil & Gas UK and the Oil and Gas Authority; I will hear from the trade unions to see what their needs are and speak to those involved in the Scottish Government’s Energy Jobs Task Force.
Collaboration was a key theme from last year’s summit and I am keen to see that continue with the support of colleagues in Aberdeenshire, the two governments and the private sector body, ONE – Opportunity North East.
We are very fortunate to have Sir Ian Wood among us, one of the world’s leading industry experts.
The future is very encouraging.
We know, for example, that small firms are helping to drive some expansion and investment. And more companies are starting to show an interest in renewables.
The proposed multi-million pound extension of Aberdeen Harbour is a giant step forward for the city and will support economic regeneration too.
The firms working in oil and gas know that they need to be thinking and planning for the long-term – the oil price may be low now but there have been many fluctuations in the past and it will recover in time.
There are also billions of barrels of oil waiting to be extracted from the North Sea in the future.
The new £180 million Oil and Gas Technology Centre will support Maximising Economic Recovery in the North Sea and help transition Aberdeen from simply an operational base to a major, international centre for offshore technology and innovation.
This will also anchor the supply chain here for the long term.
In the short term, though, the sector needs support and in some cases, needs to work differently. Small firms may be expanding in some areas, but bigger firms could catch up by working much more closely together.
The interest that some mid-sized firms are showing in renewables could also be boosted by more investment from the Scottish Government.
The Government in Whitehall should also provide a sympathetic ear to the case made by Oil & Gas UK and others for significant cuts to taxes on the sector.
Tax breaks have already helped make development possible, but for the sake of the high-quality jobs in Aberdeen, and the wider economy, the UK Government will have to go much further.
The region has survived previous slumps, but we must future-proof the local economy to ensure that rising and falling oil prices do not mean that the entire North-east economy rises or falls by its side.
Jenny Laing is leader of Aberdeen City Council
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