Monday 24 November 2003

Changing North Sea requires Shetland to adjust Skills and Services

Highlights from Speech to be given at the 2003 Shetland Conference Service Hub for the Energy Industry

on 25 November by Paul Dymond, MBE, UKOOA Director of Operations

Shetland should take heed of the changing nature of oil and gas operations in the UK today and adapt its skills and services accordingly if the Islands are to develop as a successful service hub for the offshore sector, says the former general manager of the Sullom Voe Terminal, Paul Dymond, who will be speaking at the 2003 Shetland Conference in Lerwick tomorrow (25 November).

Paul Dymond, now Operations Director at the UK Offshore Operators Association (UKOOA) in Aberdeen, will argue that the boom days are long since gone when the first oil flowed through Sullom Voe terminal and the momentum of discovery and development was growing apace. Thirty years ago, the intent of governments and local authorities was to moderate activities and share the commercial benefit. Today, the intent is to encourage activity and bolster the competitive position of the UK sector. Shetland should look to diversify its economy into services which can be built on the energy needs of today, whilst ensuring that the potential exists for wider application.

The significance of UK sectors advancing maturity for Shetland is twofold: in the Northern North Sea, Shetlands historic catchment area, reserves are at a more advanced stage of depletion than in the rest of the basin; secondly while there may yet be potential out in the Atlantic to the West of the Islands, the lack of exploration success in the last three years has meant that the reserves forecasts are now substantially below initial expectations.

Yet experts estimate remaining reserves within the whole UK sector to be between 24 and 32 billion barrels of oil equivalent, about as much oil and gas again as have been produced to date.

There is a clear opportunity for Shetland to build on existing services and develop new markets including capitalising on the closer co-operation between the UK and Norway and the possibilities within the Faeroes.

This must build on local strengths, argues Paul Dymond, who suggests that the areas of focus might be:

- Sullom Voe : extending the customer base for transportation by ensuring that the plant and port offer services at competitive rates;

-Logistical services: marine and aviation support for offshore platforms, building on the success of Skatsta which has helped operators to reduce transport costs by sharing flights. This approach could be extended to marine operations. The accommodation and catering services generated by increased business activity from stop-overs or visits would provide an additional spin-off benefit for Shetlands tourist strategy;

-Environmental services: Shetland operations have been synonymous with good environmental performance which could provide a brand to benefit niche environmental services for testing, clean-up response and waste management. Such expertise developed for the North Sea could be a springboard into other markets and other sectors, both here and overseas;

-People: Shetland has the potential to provide academic and vocational training for technicians who could be employed locally, offshore or abroad.

A strong local safety culture and skills development ethos will equip the workforce to deliver a range of employment options, says Paul Dymond. The potential exists for local people to build a rewarding career in this industry and prolong the Islands long and fruitful association with the sector.

-ends -

Notes to Editors

1. The UK Offshore Operators Association (UKOOA) is the representative organisation for oil and gas companies licensed by the UK government to explore for and produce hydrocarbons offshore around the British Isles. It currently has 29 members.

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