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will work with industry and, crucially, promote

collaboration by operators for the good

of the UK. It was also announced its remit

will extend to onshore (shale) as well as the

licensing activity for Natural Gas Storage and

Unloading and Carbon Dioxide Storage.

A key focus for the new authority will be to

work collaboratively with industry to implement six key

strategies in the Wood Review

covering: Exploration, Asset Stewardship,

Regional Development, Infrastructure,

Technology and Decommissioning. These

are dealt with in Section 4 of the Review

(see link at the end of this article).

The Review says: "In implementing these

strategies, operators will avoid unnecessary

costs, delays and technical, legal and commercial

complexity in their dealings with one

another and with the Regulator."

UK SUPPLY CHAIN

All this is good for the UK supply chain

which is integral to the success of the

UKCS, and which the Government is committed

to support.

Its UK Oil and Gas Industrial Strategy which

came out in 2013 said: "Industry and

Government recognise that supporting the UK

supply chain domestically will have positive

spill over effects on ultimate recovery from the

basin, UK GDP, employment and taxes."

A series of initiatives are under-pinning the

rhetoric. These cover areas ranging from

Access to Finance and Skills Development

to Decommissioning, Engaging with other

industries (including Renewables), Safety,

and UK Supply Chain domestic and international growth.

On the supply chain, the Strategy says:

"There is a case for refocused Government

attention on UK content." It wants to convert

the sector's high investment into British jobs

by working closely with the Industry to identify strengths

and weaknesses in the chain -

and to strengthen it.

The sector has a long-standing UK Supply

Chain Code of Practice which spans the

spectrum of the sector's buyers and outlines

a set of best practice guidelines to improve

performance, eliminate unnecessary costs,

add value and boost competitiveness.

It broadly covers: plan, contract, perform

and pay. At the same time, many Tier 1 and

Tier 2 companies in the sector have their

own codes and supplier guidelines.

The Strategy points companies to the BIS

funded Advanced Manufacturing Supply

Chain Initiative as a route to develop

strengths in the supply chain. "The ultimate

goal is to maintain a viable and globally competitive UK supply chain that not only serves

the industry through to decommissioning but

is anchored in the UK."

It starts from a position of strength, and is

well positioned across the upstream chain

with more than 3000 companies achieving

revenues of £35 billion year.

GLOBAL LEADER

"It is internationally recognised as a global

leader in subsea engineering and a centre of

excellence in project management, design

engineering, asset and operational management, design and manufacturing of

advanced equipment, R&D, safety management training

and education and professional and financial services,"

says the strategy,

which tellingly is sub-titled "government and

industry in partnership."

ENERGYOIL & GAS

21

continued on page 22

Significant rising demand is forecast

for products and services, both

onshore and offshore, says a Supply

Chain Market Intelligence report commissioned by Oil and Gas UK, the

major trade body for the oil sector.

The report was produced to support an

ambitious sector-specific strategy for oil

and gas resources developed by the Oil

and Gas Industry Council, which advises

the Government on the implementation

of the nation's oil and gas strategy.

It was carried out for O&G UK by Ernst

and Young and its focus is on three

selected sub-sectors: Engineering, operations, maintenance

and decommissioning

contractors (EOMD); Drilling and well equipment design and manufacture

(DWEDM);

and Marine and subsea contractors and

equipment (MSCE). All three can expect

increased demand both in the UK and

overseas.

The Market Intelligence report is accompanied by a second report

- 'the UK Upstream

Oil and Gas Supply Chain - Economic

Contribution' - which has detailed analysis of

the sectors and their segments.

It shows some welcome growth patterns in

the past five years. Engineering sub-contractors,

which includes companies providing

complex engineered solutions and precision machined products,

is one of the

strongest.

Both reports can be seen at this link:

http://www.oilandgasuk.co.uk/

knowledgecentre/economiccontribution.cfm

RISING DEMAND FOR PRODUCTS AND SERVICES

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