Technology from Europe
SCOTLAND / INTERVIEW

Scottish energy economy will depend on diversification, new opportunities

From its origins in the harsh North Sea, the Scottish petroleum industry has survived and prospered by evolving. David Anderson, Senior VP at Scottish Development International, talked to World Oil about how Scottish petroleum and service companies have branched out into other regions of the world and into renewable energy resources, and how the country has succeeded in attracting foreign investment.

DAVID ANDERSON is a Senior Vice President with Scottish Development International (SDI), the specialist investment and trade arm the Scottish government. Anderson has over 15 years of experience with international business development and currently leads SDI’s offices in Chicago and Houston, from where he promotes the international development of Scotland’s energy industry.

World Oil: First of all, what is Scottish Development International’s primary role?

David Anderson: Essentially, Scottish Development International is the specialist investment and trade arm of the Scottish government. We are a single point of contact for all Scotland’s international business development needs; we support Scottish companies in the export of their goods and services. And very often this includes oil and gas technology. Also, very importantly, we work with overseas companies to help attract investment into the country. We work with some of the biggest players in the oil and gas industry such as Chevron, which is already established in Scotland, Talisman and ExxonMobil. These guys obviously came because of the opportunities in the North Sea, but they have stayed and are developing technology in Scotland.

WO: What technologies will be required for maximizing resources out on the continental shelf?

Anderson: Well, as the continental shelf becomes more mature, we will be looking for more high-tech subsea resources, deepwater expertise and some niche players as well. Of course, we already have some of those people and skills in Scotland. In fact, we work very closely with universities here to make sure we stay at the leading edge of technology.

WO: Currently, are there some major field projects that utilize the technical expertise of Scottish firms?

Anderson: Well, for example, there is a UK mission going down to Brazil next week to talk with Petrobras. There are some great deepwater opportunities down there. And the same goes for Australia, Nigeria and Angola. We’re exporting the expertise that we originally developed when we cut our teeth in the North Sea.

WO: To what extent has the Scottish industry come back from the global financial crash of 2008?

Anderson: As an industry, we’ve bounced back fairly strongly. Most of the oil industry is based in and around Aberdeen. We did see some withdrawal of investment there in 2008–2009. But more recently there have been indications that investment is increasing again. Companies are not just investing but also taking on labor. My own view is that the industry did not fare as badly as some did. We felt the recession in Scotland much as other places did, and while the oil and gas industry wasn’t immune to it, the downturn didn’t last as long.
We’ve been encouraging our companies to internationalize. There are still huge opportunities globally, and Scotland has a great reputation that when things are down at home, you go out and look for places that are good. Brazil is a good example of that, and India is another. The crash almost didn’t happen there.

WO: Does your organization work with EU or UK governments on climate initiatives?

Anderson: As a government agency, we are very encouraging in that area. With our existing companies we recognize that, while there are still opportunities in oil and gas, in the longer term we have a responsibility to look at new technologies, particularly in renewables. We care about current business, but we also keep a close eye to the future.

We have already seen examples of several Scottish oil and gas companies which, while still in the old energy industry, are moving in the direction of renewables. One such company is Bi-Fab. They are an oil and gas support company that is moving and taking advantage of some of these alternative opportunities.

As another example, SDI has been really supportive of a carbon-capture research facility in Scotland. They have teamed up with global partners, companies from around the world, particularly from Europe, that expressed great interest in participating in the research and innovation that’s happening here.

Again, Bi-Fab has been a shining example of a firm that has not moved entirely into the renewable energy world, but has seen the value of investing and diversifying the places they’re putting their resources into, in order to better match the multi-faceted energy markets.

WO: In general, what should government regulatory agencies be doing?

Anderson: Government regulatory authorities’ job is to take the opportunities that are put in front of us. Regarding the agency I work for, the government can provide support simply by making Scotland a good place to do business. Regulation should be business-friendly. We need to make sure that when companies come here, there is a friendly environment in terms of regulation, and more generally.

WO: Is your organization working with companies that explore in Arctic regions?

Anderson: Certainly we have supported some companies who are working up there. It is a very, very challenging environment, as you can imagine. Whether that is in the shorter term or longer term remains to be seen. Companies will go where they think they can be successful. Some of the more forward-thinking companies are definitely looking at the Arctic.

WO: How do you see Scotland moving into alternative forms of energy such as wind or wave power?

Anderson: Speaking from a Scottish point of view, we are extremely proactive in renewable energy. That comes from the highest levels of government down to agencies such as ourselves. We see Scotland being very much part of renewable energy in the future, both in terms of wind power and wave power projects. Some of the international companies were already attracted into Scotland to do research in those areas, companies such as Mitsubishi and Gamesa. Up in Orkney we have a facility that tests various marine energy concepts.

We feel we’re at the forefront, and are looking to do business in that respect. We have fantastic resources, some might say unfortunately, in that we have a lot of wind and we have a lot of waves.

WO: What are the general trends for the future of oil and gas?

Anderson: I still think we can all have our own views. I was at the OTC conference last year, and we had two very well-respected experts on the panel, sitting literally at both ends of the table and both ends of opinion. Some say we have 30 or 40 years of abundant oil and gas, and some feel that if we don’t move on [alternative energy] now, then soon it may be too late. I think the answer is somewhere in between. Oil and gas is still a healthy industry, but longer term, we have to look at renewable options, both for the environment and our economy.