Long-standing relationships have been cemented at this year’s OTC Houston. The theme of collaboration was apparent when we met with new and existing partners from around the world.
Our UHY International Energy Special Interest Group (SIG) met this week and we discussed the close bonds between our countries. Trends show partnerships emerging between geographically close nations, while others share cultural and historical links.
A significant and key example as we meet in the USA is the country’s close and growing relationship with its neighbour Mexico. Success stories from Latin American nations including Brazil and Columbia have encouraged the Mexican government to open its doors to foreign oil and gas companies for the first time, but it is strictly by invitation only.
It is a move of historical significance because since nationalisation, more than 75 years ago, it has been an exclusive Pemex party. The modern message coming from Mexico is ‘we are open for business.’
Aberdonians who are Green Card holders, based in the USA are already working in Mexico and this trend is likely to continue with an even greater input from the UK. Scotland and Mexico, coincidentally, have similar tax systems, with the Mexican government putting measures in place to encourage inward investment.
Another bond that continues to strengthen is that between the UK and Australia. More than one in 10 Perth residents is from Britain. Perth becomes increasingly cosmopolitan and also has strong expat Asian, New Zealand and South African populations. There was a 210% rise in Chinese residents between 2001 and 2011 according to the Australian Bureau of Statistics.
However, despite the global influx in Perth, the long-held cultural familiarities between the UK and Australia remain strong. The congeniality between the two nations was recently backed up by large crowds welcoming the latest member of the Royal Family, Prince George.
There are high costs associated with doing business in Western Australia, however, the risk and reward opportunities need to be taken into consideration in project evaluation. The Australian Petroleum Production and Exploration Association (APPEA) has received notice of more than $200billion worth of new projects under construction and forecasts even greater economic impacts as the decade progresses.
To date, an estimated 100,000 oil and gas jobs have been created in the Australian economy. This figure will only rise as Australia’s LNG production triples by 2018, boosting the country’s GDP by $260bn by 2025. Accurate forecasts can be made due to lengthy lifespans of the many projects. For example, the oldest LNG project began operations 25 years ago and work is ongoing to extend its life by 20 years.
The spending power of oil majors the world over is matched by the disposable income of workers in energy hubs, including Aberdeen, the Gulf of Mexico and Perth. This boosts economies and creates melting pots of creativity and networking. This drives technological advances to make hydrocarbon recovery cheaper, faster and safer.
Long-established production centres like Mexico and Australia have a constant demand for more people and new ideas. If international collaboration achieves those aims, then long may summits like OTC Houston continue.
Ian is chairman of Campbell Dallas LLP.