Disrupt or be disrupted. Those are the options open to Aberdeen in the field of low-carbon technology development, according to entrepreneur Martin Gilbert.
He said the energy transition was a golden opportunity for the Granite City to continue the huge wealth generation delivered by the oil industry over the past 50 years.
Gilbert spoke of a huge “wall of money” destined for investment in the renewables sector and said Aberdeen was in a good position to “piggyback” on that enthusiasm.
“There’s money available to invest, we’ve just got to make sure we get our fair share of it,” he said.
He believes this is an area where he can be of great service to the OGTC, which appointed him as chairman in June 2020.
Gilbert wants to help the organisation, and its host city, Aberdeen, make the most of the transition to net-zero.
He knows how to spot opportunities and attract investment.
Gilbert co-founded AAM in 1983 and helped it grow into one of the investment sector’s biggest players.
He currently sits on the boards of, among others, commodities giant Glencore, digital bank Revolut, hedge fund Toscafund and River and Mercantile Group, such is his reputation.
And, with his bulging contacts book, he can make connections and open doors in the worlds of finance and government for OGTC’s leadership team, led by chief executive Colette Cohen.
Gilbert also described himself as a “great believer” in start-up companies and disruptive technology, which makes the OGTC an even better fit.
In addition, he has witnessed the impact that the growing support for decarbonisation can have on the strategies of large companies.
Gilbert observed that shareholders had not really “flexed their muscles” to affect much change in industry until recently.
In his capacity as a director of Glencore, he realised times were changing for big commodities companies.
Shareholders encouraged Glencore bosses to change the way they looked at the world, prompting the firm to announce a cap on coal production in January 2019.
He is aware of banks putting pressure on fossil fuel companies, telling them they must change their ways or wave goodbye to future borrowing.
Gilbert understood Aberdeen and its oilfield service sector had to “adapt faster” to the low-carbon landscape.
Against this backdrop, he was asked to take on the role at the OGTC, established in 2016 as the Oil and Gas Technology Centre.
Created as part of the Aberdeen City Region Deal, with £180 million of UK and Scottish government funding, its remit was to help maximise economic recovery from the UK North Sea.
The centre has increasingly been turning its attention to developing low-carbon technology.
In September 2019, it announced the launch of a £50m Net Zero Solution Centre to support the UK’s energy transition and make the North Sea industry “part of the solution” to climate change.
And the organisation dropped “oil and gas” from its name in a soft rebrand last year.
Gilbert was encouraged to take up the position on the organisation’s board by Sir Ian Wood, OGTC founding chairman.
He said: “Sir Ian said we’ve been lucky (in our careers) in that we got a great run out of Aberdeen. He said I could add perspective to OGTC.
“I would like to help Aberdeen with the transition, because, as a city and an industry, if we do not disrupt, we’re going to get disrupted.
“I have tried to support Colette on the pivot to net-zero. I can help her team with contacts in London that I’ve built up over my career.”
“For example, Andy Griffith, who was recently appointed ‘Net-Zero Tsar’ by Boris Johnson, is a friend of mine. He was CFO at Sky when I was on the board there.”
Covid-19 has made getting under the bonnet of OGTC more challenging than it might otherwise have been, but Gilbert has had regular meetings with Cohen.
He said there is a clear dividing line between their roles: “It’s my job as chairman to manage the board and support the CEO. She’s got to come up with the strategy.”
Identifying opportunities in renewables and “continuing the good work” in oil and gas are the “priorities” over the coming years.
Gilbert acknowledged that UK manufacturing capability in the green energy sphere had to be stepped up significantly if the country is to meet its net-zero target.
He said gas, billed by many as a “transition fuel”, had a massive future, but stressed that oil would remain an important part of the mix.
Gilbert insisted OGTC would keep its doors open for innovators whose technology is designed to increase oil production.
He said there would be more demand for that sort of technology now in the sector because of volatility of the oil price.
In addition to helping develop technology, maintaining the centre’s relationships with the governments that provide its funding is always high on the agenda.
Gilbert said OGTC’s model, whereby matched funding is required from industry, works well.
According to its 2019-20 annual report, about £150m had been co-invested since OGTC’s inception in more than 230 projects, generating £10-15 billion in potential value to the UK economy.
Gilbert insisted OGTC had fulfilled a “huge purpose” and provided “incredible benefit” to the energy sector.
But he said it was always important to plan for times when governments tighten their purse strings, particularly now that the economy is under such massive strain amid the Covid-19 pandemic.
Speaking with his OGTC chairman hat on, Gilbert said: “We should be looking at what other sources of money there are apart from government.
“The UK is in reasonable shape because of low interest rates. That’s what has saved us as a country, with all the debt we’ve been taking on.
“But we’ve all got to be realistic – government is going to be looking to tighten its belt.
“We have a massive benefit to the economy but everything is going to come under pressure over next five years so we’ve got to be looking at other sources of funding for R&D.
“At the moment, let’s be clear, we’re government funded and we give it away.
“If I look at IP Group, a disruptive medical technology firm, they’ve got a different model.
“They invest and get the benefit of the research so that’s the alternative funding model – get institutions to fund the technology.”
