Ian Couper, Chief Executive, Energy North, UK
Ian Couper, Chief Executive of Energy North, UK talks about the role of Energy North, stating that “[it] is to make sure that the members are involved in supplying information and that the voice in the Highlands and Islands is heard. With regard to the survey, this should not just be an information gathering exercise. We first need to understand exactly what the industry requires in terms of data and ensure that the information collected matches those requirements.”
Why is Energy North of interest to the energy markets?
We are a membership trade organisation covering both oil and gas and renewable energy. We have members from both of these markets within the group. We’ve grown in the last six years from around 26 members to a current total of two hundred and eleven. We’re now operating geographically from the Shetlands to the southern tip of Argyle and from the Outer Hebrides across to Aberdeen. Our Aberdeen membership is increasing as a result of the work of the oil and gas task force.
We work very much on a regional basis and have eleven regional members meetings within our own area that meet twice a year: Shetland, Orkney, Inverness, Aberdeen City and Shire, Moray, Cromarty Firth, Outer Hebrides, Caithness and Sutherland, Argyll and Lochaber. This is where the members in each area come together and give us suggestions, inform us of issues, and request actions from Energy North.
Energy North is also involved in overseas trade missions and seeking to attract inward investment. We’re looking to step this up in 2014. All too often, foreign investment and trade missions stop at Aberdeen or the central belt so we want to attract these activities into the Highlands and Islands.
What other geographic areas will you be looking into?
Well, we’re looking at opportunities for members in both oil and gas and renewable gas markets. For oil and gas, we could be looking at the possibility of Australia, and Brazil again. We are also interested in establishing relations with the Middle East and Far East, especially China and Africa. All of these come into the reckoning for this year, but we haven’t yet finalised exactly where we’ll be going. In terms of renewable energy, there’s also a lot going on over in Canada.
We generally undertake our trade missions working closely with Scottish Development International (SDI) and we are influenced very much by the enterprise bodies. Highlands and Islands Enterprise is the main enterprise body for the area in which we operate. We’re also starting to work more closely with Scottish Enterprise now, because of their involvement in Aberdeen.
Are you seeing any signs that oil and gas companies have been diversifying their businesses more towards renewables?
I’m sure that some of them would really quite like to and some of them already have their own renewable energy divisions. Nevertheless, the hard fact is that Aberdeen is so busy just now that they don’t really have time to go looking for anything else. Some of them are perhaps looking at the opportunities more seriously than others. The larger players are the best example of this.
You mentioned the special task force chaired by the Minister of Energy of Scotland, Mr Ewing. Could you elaborate on that and the specific role of Energy North?
Our members in Aberdeen have been telling us about various capacity issues they’ve been experiencing—notably a shortage of labour, supply chain services and infrastructure issues. The companies in Aberdeen are very keen that solutions are found, but very few have the time and resources to this alone; therefore, the Energy North Oil & Gas Taskforce is seeking to utilise what’s available throughout the Highlands and Islands to assist the Aberdeen oil market.
We have a guidance group that’s overseeing the taskforce operations and it’s made up of leading industry players from Aberdeen, such as Wood Group, BP and Chevron and from the Highlands and Islands, Global Energy and other leading companies are also involved. The guidance group is 25 members strong which makes it a fairly large group, but we felt it was very important to have representation from the main players from both areas. The key point is that this is an industry driven group. We only have six public bodies on the group which means industry is the real driver behind this.
The guidance group will be overseeing the development of the task force, and below the guidance group three work groups have been established. The first work group is looking into skills issues and aims to try to increase the labor pool by trying to attract more people into the industry such as school leavers. The second work group is tasked with introducing more supply chain companies into Aberdeen, perhaps to JV with the current businesses that may be at full capacity. Energy North will be chairing that. The third and final work group aims to explore what’s available in terms of industrial space and office space throughout the highlands and islands; Highlands and Islands Enterprise is taking the lead on this together with the promotion of potential resources to the Aberdeen market.
The work groups report to the guidance group on a quarterly basis and receive instructions for the coming quarter. Right now the task force has a two-year shelf life, but it has already become clear that some of the initiatives that we’re working on will last well beyond a two-year period.
Personally, I see some issues where there could be a quick win for Aberdeen and other issues that are going to take much longer to develop. One quick win that can come from the workgroups is simply to increase the supply chain potential. Convincing businesses to partly relocate into the highlands and islands and move out of the Aberdeen area could take rather much longer though. Of course this doesn’t need to be the oil and gas companies themselves. Part relocation could be a sound business development decision for service providers such as IT companies that originally set up in Aberdeen to service the industry but don’t actually need to be in Aberdeen to carry out their functions. This is an issue that the Highlands and Islands Enterprise led workgroup will be tackling. Fergus Ewing has already said in the press that he’s hoping to get around 5,000 jobs into the Highlands and Islands as a result of this. The work group will probably fine-tune that figure over the next few months.
Capital investment of £11.4 billion in the UK‘s oil and gas reserves in 2012 was the highest in 30 years; in 2013 investment will reach a record £13.5 billion. Has this increase in economic activity translated into more companies setting up operations in the North of Scotland?
Well it should, and there is evidence that this is the case. Aberdeen is bursting at the seams right now in trying to get hold of labor. One very good reason for having the task force is to see if we can help ease some of this pressure on labour requirements and supply chain requirements. The Aberdeen, Scottish and UK oil & gas market is going to be very busy over the coming years and the workforce shortage is something the taskforce hopes to help address.
There is one issue that we are very keen to highlight. This is not about taking work away from the supply chain in Aberdeen. What we’re looking at are the extra capacity issues that Aberdeen cannot cope with now or in the future. Through the task force, SMEs in Aberdeen that are already operating at or near capacity will hopefully see new options of cooperating, or even joint venturing, with companies throughout the Highlands and Islands that will result in them being able to take on even more work. The working group that Energy North is leading will endeavour to develop this idea.
You mentioned the lack of skilled labor. OPITO recently announced the largest ever study in North Sea skills. The study is being led and managed by OPITO on behalf of industry and in partnership with SubseaUK. What is the specific role of Energy North within this study?
Our role is to make sure that the members are involved in supplying information and that the voice in the Highlands and Islands is heard. With regard to the survey, this should not just be an information gathering exercise. We first need to understand exactly what the industry requires in terms of data and ensure that the information collected matches those requirements. Energy North will shortly be participating in a meeting along with OPITO, SubseaUK, Oil and Gas UK so that these aspects can all be coordinated.
We have high hopes for the survey because this will be the first time that all the main bodies will be contributing to the same single survey. As long as we can extrapolate the information we need from it for our own specific area, as I’m quite sure we can do, and as long as other people can do the same for their areas, then the survey will be a big success. The survey will be undertaken every couple of years, rather than annually because the situation is unlikely to vary much year on year. This survey, of course, is exclusive to the oil and gas sector. Energy North may well conduct an equivalent survey for the renewables sector in every alternate year. That is definitely something we’re seriously considering.
The expansion of your membership from 26 to 211 members is certainly impressive. What has been your proudest moment as head of the association?
I’m immensely pleased at the way that the regional approach has worked so well. I think that’s what distinguishes Energy North from other equivalent organisations. It’s a big effort for my staff team to get around to all of these areas to ensure that we’re staying close to the members. The Highlands and Islands are well spread out, but we need to make sure that there’s always something in what we do for local members to gain from without necessarily having to attend meetings in Inverness. For that reason, we go to them rather than them coming to us. This, I believe, has been the biggest single factor that has led to the growth of the group.