Oil & Gas UK turns the spotlight towards the UK oil&gas supply chain in November with two major events specifically designed to help strengthen the long-term future of this hugely important part of the sector.
Up to 1,000 delegates are expected to attend the 10th PILOT Share Fair as well as the first Oil & Gas UK conference dedicated to supply-chain issues on November 11-12 at Aberdeen Exhibition and Conference Centre. Over the two days, delegates will find out about new business opportunities, best supply-chain practice and the compelling case for a long-term sustainable supply chain in the UK.
Traditionally, in economic terms, attention has tended to focus more on the sector’s production activities, overlooking to some extent the massive contribution made by the industry’s extensive supply chain, which production companies rely on for both their UK and, increasingly, worldwide operations.
Since its launch in 2007, Oil & Gas UK has been working with its expanding list of supply-chain members to develop a greater understanding and recognition of this thriving part of the sector.
Our latest economic report, published in July, for the first time painted a comprehensive picture of the supply chain to complement the now more familiar annual overview of UKCS production. We are beginning to understand the extent of the contribution made by the supply chain to the UK economy in its own right, measured in terms of employment, direct taxation and exports. For example, our research shows that supply-chain companies reported a 23% year-on-year increase in turnover in 2007 (including exports) and direct sector employment grew by 10% between 2006 and 2007, to about 22,500. Currently, each £1billion spent by the industry provides about 20,000 jobs across the supply chain, whether the money is operating expenditure or capital investment.
The report also highlights, in particular, the strong export figures of our supply chain, with the value of annual exports of oilfield goods and services reaching about £4-5billion. The UKCS is fast developing a reputation as a global centre of excellence for the provision of oilfield goods and services and export business is being won in a variety of areas such as subsea engineering; high-pressure, high-temperature field developments; oil&gas process machinery; deepwater developments; consultation, and legal services.
With an estimated 25billion barrels of oil&gas still to be recovered from the seabed around the British Isles and an increased focus on higher risk developments with their technical and commercial challenges, sustained access to the knowledge, skills and expertise of contractors and suppliers across the full spectrum of the supply chain will be vital. Also, as the diversity of players in the basin evolves and smaller operating companies arrive, the industry needs to change to a culture of faster, more efficient ways of doing business.
That is why Oil & Gas UK will focus its annual conference this year on supply-chain efficiency, sustainability and best practice, combining learning from both inside and outside the sector.
The event, which is sponsored by Shell, will focus on three key topics: business perspectives, supply-chain sustainability and cross-industry learning.
The first part, business perspectives, will explore the strategies employed by two major UK contractors to secure business at home and overseas. The second session will look at the broad area of supply-chain sustainability, from a commercial, as well as human-resource, aspect.
Conference delegates will hear, too, about best practice from other sectors, including defence, construction and Government.
While the supply-chain conference aims to increase business efficiencies, PILOT Share Fair 10 will focus on creating new business opportunities for the supply chain. This year’s event, which is sponsored by CAN, a leading provider of engineering, inspection and maintenance solutions, aims to provide small and medium-sized suppliers to the oil&gas industry with the information they require for long-term business planning. About 16 leading operating and major contractor companies are expected to present their project development work plans and activities scheduled over the next 18 months, representing potential new business estimated to be worth in the region of £4billion.
With costs at an all-time high in the basin, it has never been more important that we find ways to add value and improve performance; this will ensure the future competitiveness of the UKCS. One way of doing this is through the use of the Supply Chain Code of Practice. The code is a set of best-practice guidelines which have emerged from joint efforts by industry to standardise and simplify commercial arrangements between companies. Oil & Gas UK monitors progress regarding implementation of the code on an annual basis by means of a compliance survey. The latest 2007-08 survey is now available at www.oilandgasuk.co.uk
Paul Dymond is operations director, Oil & Gas UK
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