I am proud to live and work in Aberdeen and North East of Scotland, a city and region built on its surrounding natural resources and all the support sectors that come with them. Our heritage is built on our natural resources, such as granite, fish, oil & gas – and recently we have been attracting attention for our role in renewables with the opening of some of the world’s most powerful wind turbines in Aberdeen Bay last year. Furthermore, food & drink and tourism are crucially connected to our natural resources and we are starting to understand the importance of industry diversity, the value significance of provenance and what our local heritage means to the outside world. Some of these larger local industries are not what they used to be, however, in Aberdeen and the North East of Scotland, it can be argued that our natural resources are still amongst our greatest assets – they are our future.
The Oil & Gas industry has suffered in recent years and despite a return to more economically viable oil prices compared to 2015-2017, we are still seeing price fluctuation and uncertainty due to complex global geopolitical factors. In the upstream E&P sector, changes in operating structures and the lowering of lifting costs have generated a new positive phase in activity and this is enticing new entrants to the market. Some say that lower oil prices recently (in late 2018) may actually help to spur on M&A activity, but what is widely agreed is that under the right conditions, with 10 to 20 billion barrels of oil equivalent remaining in the UK North Sea, there is still plenty of opportunity here to pursue.
Oil & Gas services have arguably suffered more and for longer than the upstream operating sector in the recent downturn – and we are yet to hear the starter gun fired in the decommissioning sector. With the support of the whole industry, including the new bodies set up such as OGTC and OGA, and from government, we can hopefully prepare for, sustain and capitalise on new opportunities in oil services and decommissioning either in the North Sea or for international export.
Out with our primary industry, other important sectors offer important sustainability and growth opportunities. Food, Drink and Agriculture directly employs more than 22,000 people in the region and these sectors are intrinsically linked to the high quality of our natural resources. Not including the whisky sector, the North East of Scotland contributes an estimated 20% of Scotland’s food & drink output, around 25% of primary agricultural output and 50% of its fish landings.
Not only does our local environment provide us with some of the finest produce, it offers endless opportunities for outdoor pursuits, leisure activities and tourism. Contrary to popular belief from our southern neighbours, we have a relatively dry and stable climate (at least in Scottish terms) – and with our close proximity to mountains, hills, ski slopes, golf courses, forests, lochs and beaches – many of us who have lived here for decades do not appreciate how fortunate we are. In Aberdeen, we have improved road connectivity thanks to the AWPR, and the new global standard conference centre and surrounding infrastructure is soon to open. Further afield in the region, there are numerous new tourism opportunities being developed, from Peterhead’s prison museum to the re-opening if the Fife Arms Hotel in Braemar.
The list of sectors and opportunities will go on and develop further. Our natural resources are our past – they have provided for us – and they will continue to do so for the foreseeable future. Despite political uncertainty that is all around us, these resources remain unchanged and we need to stay focussed on what we have and what is still available to us. We need to recognise that our natural resources are our greatest assets. Across all sectors, we need to learn how to work them, how to nurture them, to protect and preserve. If we can do these things, we will continue to prosper from them in 2019 and for years to come.
By Alasdair Green, Partner & Head of Energy
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