Power of
Tuesday June 25 2013
Scotland
Going Global
Britain’s Energy Coast Brian Wilson and his vision for a balanced policy
Subsea innovations born in Scotland make waves abroad
Tuesday June 25 2013 | the times
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Power of Scotland
Welcome
REUTERS/Edgar Su
Dynamic range of voices This issue of Power of Scotland tackles a diverse range of issues significant to the energy sector. Former Energy Minister Brian Wilson takes centre stage, speaking with some passion about the prospects for Britain’s Energy Coast in Cumbria, of which he is the chairman — and he adduces some lessons from Scotland’s experience in the North Sea. On these pages Ian Williams stresses the crucial need to enter the international market while Peter Jones weighs up the legacy of big mineral corporates in places such as sub-Saharan Africa. Elsewhere, we look at the innovation born in Scotland making waves overseas; examine the welfare of offshore workers; take a positive long-term view of decommissioning and note the new, expert roles being played by former Forces personnel. Cover: MARY TURNER FOR THE TIMES
Inside ... Going global
Subsea innovation developed in Scotland is proving a major asset worldwide Page 4
Cover story
Former Energy Minister Brian Wilson outlines his vision for Britain’s Energy Coast Page 8
Antidote to sea sickness
The industry takes a strategic approach to the welfare of offshore workers Page 10
Cleaning up
Decommissioning’s long-term future is assured Page 12
Fighting fit
Ex-Armed Forces personnel are filling a skills gap Page 14
Singapore is ranked first globally by the World Bank in terms of doing business
Overseas market is not the barrier you might imagine Scottish businesses should not hold back from international expansion and, instead, confidently enter new markets, says Ian Williams
T
he oil and gas industry is in the midst of rapid growth. International activity has played a key role in the industry’s success, accounting for 47.6 per cent of total sales. In 2011-2012, exports soared by 8.4 per cent, amounting to a total of £8.2 billion. Operations in the North Sea have made a vital contribution to this growth and the area is now recognised as an important test bed for cutting edge technologies, helping the industry to move into deeper waters and remote locations. The activity has attracted hundreds of international companies, allowing mutually beneficial relationships to form around the world. But the multi-cultural scene in the North Sea should not be used as an excuse for UK oil and gas companies to shelve international growth plans, nor should tricky tax procedures, language barriers or political red tape. Expanding into overseas markets allows businesses to develop financially and increase in productivity, in ways that are not possible domestically. Recent research conducted by UK Trade and Investment showed that companies which export to global markets are 11.4 per cent more likely to survive. Fortunately, conducting business abroad is not as complicated as it may sound. If companies conduct
Ian Williams says that going from national to international requires careful research
thorough research and adhere to simple guidelines and legal regulations, businesses could be operating across the world in as few as 30 days. The world really can be your oyster. Preparation is paramount for expansion. Now that information is instantly at our fingertips, the expansion process does not have to involve a month-long exploratory trip to distant cities. Effective and comprehensive research can be done from home. Helpful resource guides covering every country and industry are available on the Scottish Development International and UK Trade and Investment websites. What this research will confirm is that energy hubs in every continent are easy to access to start trading. Singapore is ranked first globally by the World Bank in terms of ease of doing business. Unsurprisingly, more than 700 British companies are based in the popular cosmopolitan city state. With numerous airports and trading ports, Singapore has become an ideal springboard for the rest of South East Asia. Business is conducted in English and trading and tax regulations follow British Common Law, reducing the process down to three easy steps. Like Singapore, Australia is easy to reach. The oil and gas industry is going from strength to strength, and the close proximity to Asian-Pacific markets grant the potential for trading in even more locations. Australia has the world’s 14th largest economy and current levels of economic stability are predicted to continue. The country’s working practices, legal system and tax regulations are similar to Britain’s and there is no need for bulky dictionaries and arduous language classes. But be warned: the time difference between the UK and Australia calls for meticulously planned conference calls
and timely responses. Australia’s ease of access and the country’s willingness to welcome new services and products means that businesses planning to expand have to work their way through 13 simple steps. If done properly, a business could be operating in the other side of the world within a few weeks. While Singapore and Australia are relatively easy to enter, Brazil is considerably harder. Businesses must go through 40 steps before they can set up shop. These steps include defining budgets, classifying business activity and adhering to stringent tax regulations. Other complications include a language barrier, cultural differences and strict drilling laws which are likely to tighten with the increase of activity. Although these procedures may be complicated and time consuming, the end result is rewarding and the benefits will be quickly felt. Businesses will be able to operate in one of the world’s most vibrant and promising energy markets. According to the British Chamber of Commerce Q1 2013 International Trade survey, 32 per cent of firms would consider exporting to Brazil. The country has the second largest oil reserves in South America and officials hope that by 2015, it will be producing 2.5 million oil barrels every day. Oil and gas companies can only grow so much in the UK. Before long, expanding overseas will inevitably appear on boardroom agendas. Going from national to international requires a determined management team, a tight balance sheet and careful market research but with this in tow, overseas markets can benefit from UK innovation. There’s a world out there: it’s time to step into it. Ian Williams is chairman of Campbell Dallas LLP, head of renewables and a member of the firm’s tax consultancy group and corporate finance group.
the times | Tuesday June 25 2013
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Power of Scotland
Peter Jones
Altruism and self interest meet as the moral vacuum implodes
B
ig companies engaged in the exploitation of minerals generally don’t have a great reputation. To most people, they arrive like invaders from outer space with huge machines that rip up the land and then depart leaving devastation which no amount of recolonisation by greenery can ever either heal or conceal. Such activities might be just about tolerable if the companies concerned left behind local people who had gained a share of the wealth that had been clawed out of the ground and societies which had been enriched by physical and social infrastructure in the shape of schools and hospitals, roads and telecommunications. But, historically, that rarely happened. The reverse was all too often true. The moral vacuum with which industrial companies from the western world insulated themselves from the poor, barely-educated peoples of the developing world has now imploded, with the last blast of the in-rushing air of enlightenment being sounded by the leaders of the G8 richest countries meeting this month in Northern Ireland. Much attention was given to the statements of intent and allied policy
mechanisms aimed at ensuring that global corporations paid their due share of taxes — that is taxes due according to the spirit of the law and not the small print letter of the law as interpreted by clever lawyers and accountants. The attention was paid because of all the publicity given to companies like Amazon, Apple, Starbucks, and Google who appear to have found ways to earn millions from the citizens of countries like Britain, but to pay peanuts to those countries’ tax men. Less attention was given to another part of the same announcement — there is also going to be a crackdown on mining companies operating in poor countries to make sure they pay the taxes owed to those countries so that they become, well, less poor. Various investigations have shown that big mineral firms have become adept at setting up complicated company structures using shell firms in the Netherlands, Switzerland, Kuwait and other jurisdictions in order to avoid paying tax on profits they are making from mineral exploitation in poor countries. The government of Zambia, richly endowed with copper deposits, reckons it is missing about $2 billion a year in
taxes from mineral exploitation, more than it spends on health and education combined. In a continent which has an unenviable history of corruption, such claims are contestable. But blaming corrupt officials and politicians is no longer the alibi it used to be. Non-governmental organisations making it their business to check on the work of multi-national corporations have proliferated. Reports of dubious activities can be circulated informally
chris harris for the times
Blaming corrupt officials and politicians is no longer the alibi it used to be
and rapidly by social media, often reaching bigger audiences more effectively than does the mainstream commercial media. Economic development is producing a rapidly swelling middle class in countries that were formerly categorised as “Third World” — people who are smart, skilled in the use of the internet and mobile telephony, and who know a rip-off when they see one. Though we are habituated to thinking of sub-Saharan Africa as one of the poorest parts of the world, while in 2012 we in Europe were stumbling along with a stagnant economy, the World Bank reckons the region’s economy grew at a healthy 4.7 per cent and countries outside South Africa at a robust 5.8 per cent. It means that while extractive industries still dominate sub-Saharan economies, their service sectors are growing fast, creating a market for western goods and a demand for much higher standards of education and health care. This is where altruism, social obligations and self-interest meet. Companies which pay taxes are rather more likely to have a longer welcome than those which don’t. And the firms which go that extra mile and spend a little bit more on financing a clinic or a school are more likely to be regarded with genuine warmth than those which don’t. Corporate social responsibility? More like company self-preservation.
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Tuesday June 25 2013 | the times
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Power of Scotland
Subsea technology
Technologies created in Aberdeen make it possible to recover more from existing reservoirs across the world, says Rob Stokes
T
he North Sea is enjoying record investment this year as companies encouraged by the prospect of robust oil prices for years to come set about getting more out of existing oil and gas reservoirs and infrastructure and exploiting new discoveries. New technologies are significant in making this technically and economically feasible. Innovators design, prototype and deploy technology in one of the world’s foremost proving grounds before applying them to deep water in locations such as West Africa, Brazil and Australia. At water depths of 2,000 to 3,000 metres in these places, anything on the surface linked by cable and pipe to the seabed has to float rather than be fixed, and much will take place on the seabed — so subsea engineering is in the innovation vanguard.
Aker Solutions
The Aberdeen subsea business of Aker Solutions is supplying the controls for the industry’s first subsea gas compression system
Scottish engineering is a global necessity In the North Sea, developing pockets of hydrocarbons distant from main drilling and processing infrastructure now typically involves a subsea wellhead with control lines and piping connected (‘tied back’) to surface infrastructure. In deeper water, everything may take place on the seabed. Subsea innovations designed and engineered in Scotland are used worldwide. “Almost anywhere you go in the world, there is someone heading up a subsea department who has spent time in Aberdeen, Scotland or the UK,” says Neil Gordon, chief executive of Subsea UK, the industry association based in Westhill, near Aberdeen. For example, the Aberdeen subsea engineering business of Aker Solutions is supplying the subsea controls for the energy industry’s first ever subsea gas compression system, for Statoil’s Åsgard field. Located at Haltenbanken in water depths of 240 to 310 metres, the develop-
ment sees gas and condensate from the Midgard and Mikkel satellite reservoirs, 25-30 miles away, transported through long distance flowlines to the Åsgard B platform. Falling pressures within the Midgard and Mikkel reservoirs mean that by 2015, gas pressure will be too low to allow steady production. The subsea compressor is expected to raise recovery from both reservoirs by some 280 million barrels of oil equivalent (boe). Two 11.5 megawatt subsea compressors are to be installed in a 74 x 44 x 20 m high subsea station weighing around 4800 tonnes, with electric power being cabled in from Åsgard’s main platform. In general, moving compression from its usual place on a platform down to the seabed creates a number of benefits. “As you move closer to the hydrocarbon, you have more ability to raise falling gas pressures,” says Matt Corbin, managing director of Aker Solutions’ subsea business in the UK.
Looking to the future, Corbin says: “There are inaccessible places around the globe where you don’t really want a structure on the surface, whether that’s a fixed platform or a floating production, storage and offloading vessel.” Such locations could include the Arctic and remote fields in the Pacific, he says. “Having seabed facilities and then piping hydrocarbons back to land or to facilities closer to shore may well make developments in these regions feasible.” Initial deliveries of some components have already been made to Norway. The main template (frame), as large as a football field, sailed from Aker Solutions’ construction yard in Egersund, Norway earlier this month and will be installed on location this summer before further components are delivered. Extensive testing is planned throughout 2014 with the complete system scheduled to be operating in Åsgard in the first quarter of 2015. The hardware and software being supplied by Aker Solutions’ engineering busi-
the times | Tuesday June 25 2013
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Power of Scotland
ness in Aberdeen will control magnetic bearings, compressors, pumps and other components. “It’s a true control system in the sense that it will be taking in data, validating it, analysing and making decisions based on that data. It will then be sending instructions — for example, to move the compressor by a few millimetres to make sure it is still central within its bearings, or whether to speed up or slow down compressors and pumps and so on,” says Corbin. The subsea compression technology is currently economical on large developments, he says. “But for the future and especially for the UK sector, we might scale it downwards and make it economical for some of the smaller developments to enhance field life.” The next such project on the radar is Ormen Lange, Norway’s second largest gas field, which is operated by Shell. A standalone pilot system for Ormen Lange has been in long-term testing in Norway. “I believe Åsgard will be closely watched by the industry. Many companies would be keen to adopt this technology and utilise our ability to deliver the full system for their projects in future,” says Corbin. “That’s a global opportunity — it’s in the North Sea, Brazil, Australia, and the Gulf. “Regardless of the location, it is likely that the cutting edge technology will remain in our subsea controls centre of excellence in Aberdeen. We still see the North Sea as very much the test bed for cutting edge technologies and the subsea gas compression story is proving it again. The future of oil and gas globally is about
innovative techniques for enhancing recovery.” Enhancing recovery is also a key objective of FMC Technologies, the US owned global provider of technologically advanced solutions including subsea trees, controls, manifold and tie-in systems, and wellhead equipment. It has a subsea division in Aberdeen with manufacturing in Dunfermline. It recently outlined its new focus on life-of-field, getting more out of subsea oil and gas assets through quicker and higher recovery of hydrocarbons and minimal downtime. One example of FMC subsea systems enabling operations that were not feasible before is French oil major Total’s Pazflor offshore development in Angola.
Neil Gordon says that Malaysia is now experiencing challenges of ageing infrastructure
FMC provided three innovative subsea oil/water separation systems making it feasible for Total to extract heavy, highly viscous oil economically from Pazflor’s deep reservoirs. A new 3.2 megawatt, 5,000 psi subsea pumping system developed with Switzerland’s Sulzer Pumps provides the additional power needed to increase deepwater production rates and recovery. It is not just about the hardware. FMC’s Condition and Performance Monitoring (CPM) software system monitors software system monitors subsea and topside equipment which allows operators to plan maintenance to minimise disruptions to production. The company’s FlowManager™ system provides data to optimise flow, reduce operating costs and avoid expensive shutdowns. Because the know-how is also important, experts at FMC’s Operations Support Center provide full-time support to its customers. The deepwater story is not the only game in town worldwide, says Neil Gordon at Subsea UK, which recently sounded out Petronas, the Malaysian state owned oil and gas company, during the Subsea Asia 2013 event organised in Kuala Lumpur by Subsea UK as part of the Oil & Gas Asia conference and exhibition. “Petronas is now starting to experience challenges with ageing infrastructure in a way that the North Sea has been dealing with for a while now,” says Gordon. “They are interested in smarter technologies for inspection, repair and maintenance (IRM), and a lot of these technologies have been developed in the United Kingdom.”
The new oil and gas strategies announced by the UK and Scottish governments recognise the industry is valuable Aberdeen-based examples with recent innovation stories to tell include: Innospection, leading specialists in pipe inspection; Plexus Subsea, wellhead technology that makes intervention easier; Marinetronix, whose dynamic positioning sensors allow more tasks to be undertaken simultaneously on the seabed with reduced risk of collisions; and Bowtech Products, with design, manufacture and supply of cameras, video systems and lights for ROVs and autonomous underwater vehicles. The future for such companies looks brighter as governments look to encourage both innovation and exports as antidotes to economic stagnation. “Historically, subsea has not received much innovation support from government, but the new oil and gas industry strategies just announced by both the Scottish and UK governments have recognised that the industry in general is valuable and has to be nurtured,” says Gordon.
Welcome to the factory floor Subsea production and processing systems You are looking at the ‘subsea factory’ – oil and gas production facilities located directly on the seabed. It’s an ingenious response to today’s challenges of declining reservoir pressures and longer step-outs, and the next frontier in offshore engineering. Operating 24/7, it’s a factory that runs continually throughout the life of the field, making long-term reliability and maintainability a critical part of every subsea component. Today only Aker Solutions offers the right subsea technology portfolio, multidisciplinary knowledge and large-scale project experience required to build, run and maintain a production system on the seafloor. We are making the subsea factory vision a welcome reality. Subsea technology: just another example of ingenuity delivered by Aker Solutions.
www.akersolutions.com/subsea
Tuesday June 25 2013 | the times
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Power of Scotland Tyler Haglund
“We’re now getting a lot of support for smaller subsea companies in tackling overseas markets and working closely with Scottish Development International (SDI) and United Kingdom Trade & Investment (UKTI) in a strategic relationship where we look at how we should be helping companies in different parts of the world.” SDI, the inward investment and export promotion agency, has been beefing up its presence in key oil and gas locations worldwide through a string of recent offices established in Calgary in Canada, Stavanger in Norway, with Brazil coming this summer, Ghana pencilled in, and resources increased in Perth, Australia. They complement offices in other places with a vested interest in oil and gas including China, Dubai, Singapore, and Houston, USA. UKTI, the UK-wide equivalent of SDI, also prioritises oil and gas in general, and subsea within that, and UK embassies and consulates in the main markets for these industries have been asked to open doors for companies. Subsea UK has itself collaborated with SDI on guides to doing business in various locations. Brazil and Australia were the first guides, with West Africa due shortly. When Scottish Enterprise, the state development agency, issued a call last year for funding proposals for oil and gas technologies, it hoped the £6.5 million directed toward such innovation over the previous three years would rise to at least £10 million for 2012 through 2015. “In our first year we’ve allocated £2.7m and estimate that the total investment leveraged in by that is around £9 million, so we’re more or less on track,” says David Rennie, director of oil and gas, thermal generation, and carbon capture and storage at Scottish Enterprise. “We’re doing well but I think there’s a huge appetite to do more.” The first call was for innovation directed toward the integrity of oil and gas infrastructure: two awards were made. The second call, open until end of August, is around well management. “The next call will be something specifically around subsea or on reservoir imaging,” Rennie adds. “Detecting and measuring what is there is the key to unlocking what’s in the North Sea. There’s a lot more to be got out. The average recovery rate of hydrocarbons from the United Kingdom Continental Shelf is around only 40 per cent, lower than in Norway.”
We’ll be looking 20 to 30 years ahead and asking how much technology will be on the surface. The answer is probably very little
Smarter exploration processes and enhanced extraction techniques were among target technology areas cited by Shell Technology Venture, the corporate venturing arm of oil and gas major Shell, in its April announcement that it was ready to invest “several hundred million dollars” in emerging technology companies. Gerald Schotman, executive vice president innovation, R&D and Shell chief technology officer, said that the company wanted to “get these technologies up and running in our projects as fast as we can”. Welcoming this, Rennie adds: “It’s worth stressing that with all the funds and organisations around, there is awareness among operators and others of the need to deploy technology more quickly into markets to increase recovery.” This thought is a driver behind the bid that Scottish Enterprise has put in for
Shanghai in China, one of the countries in which SDI has an interest in oil and gas
Scottish Funding Council (SFC) money to set up an Oil and Gas Innovation Centre. “SFC funding has to be channelled through universities, but there’s huge industry support for the idea,” says Rennie. The project would involve a consortium of universities and industry. A decision is expected in late summer. The current independent review of the UK Oil & Gas Industry being carried out for the UK Department of Energy and Climate change under the chairmanship of retired Aberdeen oil services entrepreneur Sir Ian Wood is bound to include measures to boost innovation when it presents recommendations early next year. Export figures also continue to make a powerful case for nurturing the industry. International sales by Scottish based oil and gas industry supply chain compa-
nies have risen 14 years in succession, according to latest estimates from Scottish Enterprise and the Scottish Council Development and Industry, the economic development research and think tank that also runs trade missions. They reached a record £8.2 billion in 2011/12, 8.4 per cent higher than the previous year. With sales in 100 countries, they reach more parts than any other sector, and exports accounted for 47.6 per cent of sales compared with 31 per cent a decade before. So what next? At the Offshore Europe conferences and exhibition in Aberdeen in September, Subsea UK has taken part of the Deepwater Zone to host an event called Next Wave which will focus on technologies of the future. “We’ll be looking 20 to 30 years ahead and asking how much technology will be on the surface. The answer is probably very little. A lot of it will be done remotely,” says Gordon. One example is the ROV-Drill concept, where initial exploration drilling might be done by a modest-sized drill managed through a remotely operated vehicle. In the mid-term, decommissioning North Sea infrastructure is catalysing innovation in areas such as subsea cutting tools and containment of potential contamination, says Gordon. It is another opportunity for the North Sea to lead the way. “It’s a growing part of the future because as investment in big developments decreases there will be an increase in decommissioning to balance it, though we shouldn’t lose sight of the fact that the real prize is in extending the life of fields,” Gordon observes. “As long as we have the means to verify systems, we will be able to keep using them, and that’s where smart companies can make their mark in the subsea industry.”
Subsea industry gets new lift from Aquatic carousel
A
quatic Engineering & Construction Ltd, an Acteon Group company, is approaching completion of the first of its revolutionary new carousels — in essence a giant spool for lifting and deploying power cables, umbilicals and flexibles of all kinds — to help the subsea industry go into ever deeper water. The Aberdeen and Peterhead based company’s AQCS-01-1500 carousel is aimed at subsea contractors developing the ‘longer, deeper, heavier’ markets which the energy industry now demands. Acknowledging this trend, Aquatic has developed the technology to lift 1500 tonnes (Te), taking the maximum lift from ‘only’ 300Te in 2006. This enhanced capability dramatically increases the potential in Aquatic’s core business areas: subsea installation in shallow and deep waters, onshore services, renewables, moorings, and decommissioning. Being modular, the carousel may be disas-
sembled into pieces small enough to pack in standard shipping containers and reassembled more easily than if it had to be welded. This is important for equipment that will be rented out to different clients in varied locations. “We could not get beyond about 500Te total lift with vertical drive systems,” says Aquatic’s Singapore-based president Chris Brooks. “The need to exceed that became apparent not only in the North Sea, our key focus, but also in the Gulf of Mexico, Asia Pacific and, longer term, Brazil.” He explains: “Going horizontal brings the centre of gravity down for the overall lift and makes the vessel more stable. A 1,500Te lift takes in a whole new level in terms of what we can put in the water for oil and gas around the world.” Power cables, flowlines and other parts have different bend radii; that is, they cannot be coiled tighter than a certain circle size, but the
diameter of the carousel is variable, so it can handle multiple products, giving it a degree of inbuilt future-proofing. “We can handle oil and gas umbilicals (subsea well control, energy and chemical supply lines), power cables for offshore wind, bigger flowlines and risers in deeper waters, for example,” says Brooks. The carousel will go on its first project in August, in Asia. “That illustrates huge interest in us taking design work done in Scotland around the world,” says Brooks. Aquatic’s owner, specialist subsea services company Acteon Group (Norwich, Suffolk), will next month open a new Offshore Marine Centre in Singapore, the hub for Asia Pacific marine operations in oil and gas in particular. “That gives us a huge advantage in the region,” says Brooks. “Not only for Aquatic but for other Acteon Group companies. It also gives us capability to do maintenance and repair incountry, which will be a tremendous advantage.”
Aquatic’s new carousel is a giant spool that will help the industry go into even deeper waters
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reel opportunities Aquatic, an Acteon company, is a leading independent operator of modular drive systems and tensioner solutions for the global oil and gas, telecommunications and energy industries. We have a strong brand which is just as much about the people driving this robust and dynamic business, as the kit we provide. Our experience alone makes Aquatic stand out as unique; and we are continuing to look for more people with the skills and ‘can do’ attitude to be part of our team. The Americas | Europe, Middle East & Africa | Asia Pacific
If the prospect of working in this challenging and exciting sector appeals to you, then a career with Aquatic could be exactly what you are looking for.
www.aquaticsubsea.com
Contact us at talent@aquaticsubsea.com
Tuesday June 25 2013 | the times
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Power of Scotland
Cover Story
Man with a mission to d
Brian Wilson, chairman of Britain’s Energy Coast in Cumbria explains his views on decommissioning — and draws parallels with export skills developed in the North Sea in the 1990s. Christopher Nelson reports
S
ellafield was already a bad headline for most people, seen as the unpalatable face of nuclear power, when Brian Wilson became Energy Minister in the Labour Government under Tony Blair. But it was Mr Wilson who insisted that the much-maligned reminder of Britain’s messy nuclear past on Cumbria’s west coast should also be seen as the centre of Britain’s nuclear future — both in terms of improving that legacy and at the same time developing the sort of expertise now driving global recognition of West Cumbria as a centre for expertise in nuclear clean-up. Visit Japan, the United States, Russia, France — in fact anywhere with a nuclear industry of its own — and the name Sellafield sparks instant recognition. Not primarily recognition of the problems created by a nuclear legacy, but of the sophisticated solutions being developed there. However, here in the UK and in Cumbria itself, the S-word invariably generates a mixed reaction fuelled by historic headlines about errors and leaks – and, more recently, by rows about the billions being spent and what to do with the nuclear waste which remains. Brian Wilson is as uncompromising as ever about his support for West Cumbria and the need for the area to be recognised in the UK — as it is around the world — for the solutions it brings to the nuclear industry. “Sellafield has been given a kicking for too long without recognition of its importance for the country,” he says. “When I became Energy Minister, it was being blamed for everything, and I got to know the arguments very well. “But I also took a decision that the Nuclear Decommissioning Authority [NDA] would be based in West Cumbria. My background is very much in the peripheral areas of the country and I am a very firm believer in decentralisation. I championed the logic that if West Cumbria had taken a lot of the flak, then they should also get the benefit of the investment which followed. “There has always been a massive under-recognition of what this community has given to the country. The entire British nuclear programme for the past 60 years has been dependent on this small part of the UK. Anything West Cumbria gets out of that is a debt that is due — it is not a handout. It is a huge responsibility that West Cumbria has carried: energy security and national security. It is just a strange coincidence that this strategic asset also curves around the edge of the beautiful Lake District National Park.” Mr Wilson’s background gave him credibility, so when economic development agency Britain’s Energy Coast emerged and was looking for someone to be involved — not in the local politics
but as an outward-facing person to represent the aspirations for the area — the former MP for Cunninghame North was approached. It is a role he enjoys. “Cumbria is still the most important single location in the UK for energy,” he says. “Without it, we don’t have a nuclear industry. It is the same for defence: no Sellafield, no nuclear deterrent — demonstrating the synergy between Sellafield and its near-neighbour Barrow-in-Furness, where they build the Royal Navy’s nuclear-powered submarines. “It is very rare that you get an industry such as this, with its high value and funding, in such close proximity to what is arguably one of the most beautiful parts of the UK. You have the natural beauty and an industrial powerhouse, vital to the country, virtually side-by-side.” Mr Wilson believes there should be more pride in the achievements of Sellafield, and in the innovation which happens there through workers and supply chain companies, instead of it simply being a whipping boy for activists seeking easy targets. “That’s what angered me so much about the demands over the years to close down Sellafield,” he says, “because whatever else you can do, you can’t just close it down. People are entitled to their views, but they should also expect their views to be challenged.”
H
e is, however, no nuclear purist, always a great advocate of a mixed energy system and keen to point out that West Cumbria’s future is not just about nuclear. “Nuclear is the big item here,” he says, “but there is huge potential for renewable energy capacity — tidal, offshore wind, biomass and more. We are always very careful to talk about Britain’s Energy Coast. “My view is that we need a balanced energy policy. Unless we guard against it, we will come back to where we were 15 years ago with an over-reliance on gas. And that is where government needs to be interventionist, because if you leave it to the market, then the market will do what is easiest and cheapest. That might be all right at the moment, but may not be strategically right for the country.” Mr Wilson regards security of supply, affordability and carbon reduction as the cornerstones of a responsible energy policy. “There is no one fuel which satisfies all three,” he says, “you need a balance. It would be absolutely perverse and foolish to get rid of nuclear with carbon reduction kicking in, because if nuclear power disappears everything you do on renewables would be just cancelled out by the loss of nuclear. The reality would be falling back on fossil fuel dependence — again. “We want it to be Britain’s Energy Coast, not Britain’s Nuclear Coast, and we are working to try to encourage renew-
Sellafield ltd
Brian Wilson decided to base the NDA in West Cumbria and robustly challenges some of the negative views about Sellafield
able and clean technologies in the area. A big part of the sales pitch is the existing skills and expertise in our mature nuclear sector. I see my job as being to interface with government and external agencies to send out the message that West Cumbria is ready and willing to respond to the challenges, and to make sure that message does not get lost in the clamour. “Most people think of the Lake District completely separately from Sellafield; they are two entirely different images. But it cannot be overlooked that the nuclear industry generates high-value wages that are of direct benefit to the county’s economy. There are few areas so highly dependent on a single industry or employer – and it generates a huge number of visitors. Which is of most value to the county – a hill-walker coming for the weekend, or a scientist who comes to see what high-tech businesses are doing in Cumbria?” There is a danger, Mr Wilson believes, that people think of the West Cumbria site as “a problem with a legacy”, and do
the times | Tuesday June 25 2013
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Power of Scotland
deliver dynamic future
The West Cumbria Economic Blueprint deals with infrastructure and skills
Investment that will re-energise Cumbria
I
Sellafield? We are now in a seller’s market for its skills and experience
not recognise the skills and experience developed here. “They do not see it as an asset with great potential, “ he says. “They see it as somewhere they deal with problems, and it is a bit ‘out of sight, out of mind’. “In some ways that is how Sellafield thinks of itself — whereas, in fact, we are now in a seller’s market for Sellafield’s skills and experience, because the issues the site has been dealing with for decades are now arising all over the world and it should be more than possible for West Cumbria to benefit from the international market in decommissioning. It is why we went on a trade mission to Japan and South Korea recently and why we’re planning more trade missions with local companies. Our services are in demand. We have to change our local mindset to be more positive and more global in our outlook. “I always draw the comparison with the North Sea and the way industries were in the 1990s. When the price of oil went below $10 a barrel, they got a very clear wake-up call: export or die. With a
lot of help from government, they turned themselves into exporters. That is why now when you go anywhere in the world in the oil and gas industry you find companies from Aberdeen and Newcastle. “There are obvious parallels with the supply chain here: they could be supplying not just Sellafield but decommissioning operations across the world. And it is not just nuclear — it is high-end engineering and using hard-won skills and experience to do an incredibly difficult job on a huge scale. Think of decommissioning like complex surgery on a truly monumental scale and you begin to get some appreciation of the challenges and the extraordinary expertise required to meet them. “When people from here are talking to their peers in the worldwide nuclear community, West Cumbria is seen as a place rich in innovation and problem-solving. All of that is exportable. These are worldclass problems and we are developing and delivering world-class solutions. That is something of which we should be proud.”
t has taken a while for Britain’s Energy Coast (BEC) to emerge from the undergrowth of local restructuring and economic development agencies. In Cumbria, it was an exceptional situation because of the complexity of the nuclear industry and the various interest groups involved. A lot of time and effort was spent rationalising the organisation and narrowing down its function to address more strategic issues. With the demise of the Northwest Regional Development Agency, the core budget for BEC diminished and along with it went the perception that the organisation was a source of funding for every idea, good or bad. Now, BEC concentrates on how its resources can best be utilised for the area. There is talk about investment rather than funding. BEC has an annual budget of £8.5 million. The largest share, £3.5 million, comes from Nuclear Management Partners (NMP), the parent organisation for Sellafield Ltd. The NMP consortium of American company URS, British company AMEC and French company Areva is managing and operating the Sellafield site and the engineering design capability based at Risley in Warrington. Funding from NMP was built into their bid for the business, with a strong emphasis on community benefit — so it is not charity. A further £2.5 million comes from Sellafield Ltd, along with £2.5 million from the Nuclear Decommissioning Authority, all channelled through BEC to pay for projects on the ground and draw in substantial extra cash. In strategic terms, the objective is to create an infrastructure and environment that maximises the benefit for West Cumbria of future investment in the energy industries. That means ensuring the skills and the infrastructure exist to support these projects, and it is the guiding principle and central thrust of the West Cumbria
Economic Blueprint — a document which outlines where investment needs to be focused if the area is to achieve its full potential. The strategy talks about social infrastructure: making the towns dynamic places where people will want to live. It covers skills — one of the biggest investments is in a construction skills centre. It is about transport — the Port of Workington has benefited from funding to improve its facilities and, as the biggest port between the Mersey and the Clyde, there is the potential for a lot of logistics traffic to stay local and to be kept off the roads. High-speed broadband is another massive area of importance for West Cumbria, so that the area can be unique in what it offers businesses. Brian Wilson is a realist. “You can’t do everything with £8.5 million ... It will never be enough because this area has legacy issues of old industries, but it can be used to leverage other funds. For every pound we get from the nuclear industries, we should be seeking to get a further pound from other sources, such as the European Regional Development Fund or the Regional Growth Fund. That £8.5 million is also quite a lot per head. But do the people of Cumbria appreciate what BEC is trying to do for them? “There is such an alphabet soup of organisations that for one to stand out and people to welcome it is unlikely,” Mr Wilson says. “The reputation of the organisation is tied up with what is delivered and I think there is an expectation that the nuclear industry will put cash directly into the local community, but the fact that it is channelled through BEC is not necessarily recognised by people. “However, projects now coming to fruition will improve that appreciation of our role, and that’s something to build on to make a significant and lasting impact in West Cumbria — a new legacy of our own.”
Tuesday June 25 2013 | the times
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Power of Scotland
Health and safety
A sense of wellbeing nurtured out at sea Obesity, smoking and mental welfare are all significant issues for the offshore industry. Ginny Clark investigates growing efforts to ensure the health of the workforce
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berdeen is known for attracting the top talent in science and engineering, but it is also becoming the leading location for specialist companies recruiting the doctors, nurses and other staff who look after the wellbeing of offshore workers. Health and safety are a priority in any workplace, although offshore, the focus on preventing and managing risks clearly has an added urgency. Step Change in Safety, the organisation set up by the oil and gas industry trade association, Oil & Gas UK, has established the Workplace Health Workgroup to improve the management of health risk across the sector. “This group presents health and safety professionals with an invaluable opportunity to share and learn about good and best practice,” says Les Linklater, Step Change team leader. “We have developed an occupational health risk assessment tool to help senior managers evaluate their current arrangements and target resources to improve effective control. “The resulting toolkit can be used to conduct a ‘health check’ on companies’ management arrangements and give direction as to where their management system may be compromising effective control. Successful occupational health risk management depends on corporate control through a comprehensive management system and an adequately resourced operational process. Leadership and commitment at all levels are hugely important to ensure the risks are effectively managed.” However, one aspect that can be difficult to manage is the personal health of individual offshore workers yet this can still have an impact, not just on their own wellbeing, but also on the wellbeing — and safety — of others. Nor do we
need research to inform us — although it clearly does — that healthier workers are more focused, and more committed to their organisations, all of which offers benefits in terms of recruitment, retention and minimising absenteeism costs. Two of the most significant health challenges for offshore workers right now are obesity and smoking. Obesity is becoming such a problem, that a research project has recently been launched in Aberdeen, using 3D scanners to measure 600 offshore workers’ body sizes. The research, the first of its kind in more than 25 years, will generate an ongoing capability for continuing to monitor and measure the size and shape of the offshore workforce. Robert Gordon University’s Institute of Health and Welfare Research (IHWR) are leading the research in collaboration with experts from Oil & Gas UK, including Dr Graham Furnace, the organisation’s medical adviser. The last size survey of offshore workers was in the 1980s, with the average weight of those workers having risen by 19 per cent since, meaning body dimensions will have also increased to an unknown level. So data from this project will have a relevance for all aspects of offshore ergo-
Investing in the psychological wellbeing of the workforce could have an effect on reducing accidents
Simon Seaton oversees Sodexo’s remote site operations
nomics and health and safety, from emergency helicopter evacuation and survival suit design to the space availability in corridors and work environments. “It is already known that the majority of the UK population is overweight, and offshore workers are no different in this respect,” said Dr Furnace. “The question of ‘big people’ is a major area of medical concern within the industry because of the health risks associated with being overweight, but as the initial scans of the study already confirm, the issues relating to the size and shape of offshore workers also have important safety and equipment design implications.” One of the companies working to help offshore workers lead healthier lives is Sodexo, which has been working for some years offshore by providing healthy eating choices and, more recently, has introduced the Well Track programme, with dedicated fitness and wellness coaches. “Recent data and publications show the industry needs more comprehensive solutions to tackle obesity and poor health as well as improving workers’ overall wellness and wellbeing,” says Simon Seaton, the Chief Operating Officer overseeing Sodexo’s remote sites operations in the Gulf of Mexico and the North Sea. “Improving diet alone is not always sufficient. In 2010, we teamed up with the University of Aberdeen, as well as industry experts, and through research and development designed a unique healthy lifestyle solution known as Well Track. The pilot was successful and we were able to demonstrate that overall ‘obese’ and ‘overweight’ levels at the start of the pilot dramatically decreased at the end. Another key success factor with Well Track was the overall positive impact it had on individuals’ healthy lifestyle adoption and quality of life. “Well Track is open to all and there are now plans to have this offer rolled out to both our offshore and onshore businesses in places such as remote mining locations. Well Track is fully run by Sodexo, provid-
ing participants and their families with an incentives-based programme where they are constantly encouraged by our coaches and rewarded for engaging in healthier lifestyles — at work and on leave, both physically and mentally. “From the pilot we were able to see that job satisfaction among participants increased, and a higher proportion of participants were more committed to company goals. Another, additional benefit, is that offshore workers who lose weight contribute to lowering the costs of offshore crew transportation.” Four years ago Sodexo also commissioned the university to carry out a study with three main aims. First, to define the concepts of wellness and wellbeing; second, to examine how wellness and wellbeing are being developed within organisations and how they impact on employee and organisational performance. The third aim was to determine what impact employee wellness and wellbeing has on the performance of offshore workers, specifically in regards to reducing accidents and injuries. The results, says Seaton, demonstrate that by investing in the psychological wellbeing of the workforce, companies could have a direct impact on reducing accidents, injuries and absenteeism. “This study reviewed targeted research conducted by the university into health and wellness,s as well as the results of over 1500 questionnaires gathered from the North Sea offshore industry,” he says. “This provided Sodexo with a wealth of scientific data and insight, as well as the opportunity to develop Well Track. The recommendations from this study confirmed that ‘health’ is no longer the poor cousin in the Health, Safety and Environment equation, and that the offshore industry should investment in this area and would benefit greatly from improving quality of life offshore. “The study also showed what were previously considered ‘soft skills’, such as employee involvement, recognition and
the times | Tuesday June 25 2013
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A helicopter on a Sodexo platform provides support for the wellbeing of staff
work-life balance initiatives, were important aspects of this. Some successful examples of ‘soft skills’ from the Well Track pilot were that employee involvement in the programme remained high at 65 per cent, and recognition of this investment in employee wellness was demonstrated by employee satisfaction levels increasing from 87 per cent to 97 per cent. We were also able to track and measure the impact work/life initiatives had during home leave on the participants as we saw fitness initiatives and engagement in wellness activities increase with the intervention of the coach and home-based coaching.” The fitness and wellbeing coaches spend time offshore, and their role includes taking baseline health measurements such as BMI and blood pressure, recommending fitness and diet programmes, training the users in the technology used to track and record progress, and also being a coach and mentor to onshore crews, and a virtual coach to participants during their time off. Quality of life is also key. “Health and wellness is a very specific and highly skilled industry and Sodexo is uniquely focused on developing the holistic solutions required to improve quality of life offshore, based on our unique insights, and to consistently deliver value and a return on investment to clients and participants. “Also, as a service company, we’re always looking to develop our employees and improve our own employees’ quality of life. Offering a broader range of wellness solutions will give our employees exposure to new skills and opportunities as we grow this.”
Safety sets ever higher standards PA WIRE
There has been a reduction in the incidence of over-three day injuries “to an all-time low”, according to Oil and Gas UK’s annual Health and Safety report which was published earlier this month, and a 48 per cent drop in reportable hydrocarbon releases over the past three years “While several major incidents have had to be addressed in the period covered by this report, nonfatal, over-three day, and combined fatal and major injury rates have all been in steady decline and cases of non-compliance with verification are at an all-time low,” said the organisation’s health and safety director Robert Paterson. “Significantly, the report shows that the industry has also achieved a 48 per cent reduction in the number of hydrocarbon releases over three years, falling just short of the tough target set by the industry in 2010 to halve releases over that time. “In all this progress, our industry’s safety organisation, Step Change in The review that followed the Piper Alpha disaster 25 Safety, has played a leading role and years ago has created a robust health and safety regime most of the improvement is down to now one of the most robust offshore health and the focused, collaborative effort of companies, safety regimes in the world, the approaching workforce representatives, trade unions and 25th anniversary of that tragedy only serves the Health and Safety Executive (HSE) in Step to remind us we must never stop at striving to Change. make things safer. Continued engagement of “However there is no room for complacency. all parties through Step Change in Safety will be While the review that followed the Piper Alpha crucial in that effort.” disaster provided the foundation for what is
Tuesday June 25 2013 | the times
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Power of Scotland
Decommissioning
New generation looking petrofac
Decommissioning in the North Sea will create a host of new jobs — plus billions in industry spend. Rob Stokes looks to the next 30 years
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s business opportunities from the safe dismantling of obsolete North Sea oil and gas (O&G) infrastructure over the next 30 years look large, it is not clear where the project managers, designers, engineers, construction workers, technicians and other human elements of this great dismantling, reusing, recycling and disposal will come from. No one knows yet how many new jobs will be created by decommissioning (‘decom’), but ‘a lot’ seems a reasonable answer. The industry association Oil & Gas UK forecasts £40 billion will be spent dealing with more than 600 North Sea installations and associated infrastructure. It sees £4.4 billion of that coming by 2017 on projects that include 40 platforms, and estimates that the annual spend will rise from around £500 million now to more than £1 billion within two to three years — with as many as 10 projects on the go every twelve months. “So there’s some degree of certainty about the next five years,” says Brian Nixon, chief executive of Decom North Sea, an industry umbrella group. “And the current survey by Oil & Gas UK is trying to extend that to a 10-year horizon.” To compound the skills issue, while one hand is decommissioning, another is building new infrastructure, much of it subsea. As investment piles into a North Sea industry with at least 40 to 50 years of life left in it, decom will compete for human resources with new and existing O&G projects as well as renewables and fracking in a global jobs market. Accountants PricewaterhouseCoopers estimate that the oil and gas industry in general needs 120,000 new recruits worldwide by 2022. The Royal Academy of Engineering’s March 2013 report, Decom in the North Sea, warned: “Current figures indicate that the UK will have a major shortage of workers skilled in these activities unless there is a significant increase in production of engineering and technical graduates from schools, colleges and universities as well as sustained retention of experienced workers within the industry.” Core skills for decom are the same as in O&G already. “But there will be a need for additional levels of training and competencies,” says Nixon. “Over two or three years, the industry will develop qualifications for decommissioning engineers, project managers and technicians and these will be oil and gas profession-
Petrofac is seeing its decommissioning picking up momentum als with extra modules of training.” Companies are already organising, recruiting and training. Ian Whitehead, decommissioning director at leading international oilfield services company Petrofac, took up his post last October. His role includes: raising awareness of Petrofac’s decommissioning capability across the market; and identifying opportunities across Petrofac Group businesses including petroleum engineering, construction, facilities engineering, production operations, well engineering, and training. “Decommissioning is picking up momentum with major projects such as Shell Brent and CNRI Murchison,” he says. “With many more on the horizon, we will soon be competing for skills not only with brown and greenfield projects but also offshore wind.” Whitehead works in ‘Offshore Projects & Operations’, a discrete business unit of Petrofac, but has galvanised all business streams to develop an integrated approach to decom. “It is an ideal opportunity for collaboration and we have had a positive response from the market to this approach. Some operators may like to deal with one lead contractor rather than several, whether the collaborators are internal — from other Petrofac businesses — or from external sources,” says Whitehead.
For example, his team collaborated with Petrofac Engineering & Consulting Services and its well engineering business SPD to assist South African energy company Sasol to estimate decommissioning costs to fulfil regulatory obligations. As well as these larger collaborations, many projects within Petrofac business streams have smaller decom scopes taking place, with Whitehead’s team offering guidance and peer review. “The Petrofac decom vision is to be involved in all nine recognised phases of decommissioning. We’re quite active in some and building our capability in others,” says Whitehead. His six-strong team has experience from the Shell Brent and North West Hutton projects, but he says the challenge will be to augment this with new entrants. “The mindset is different in decommissioning but we also require the same skills and resources as in other areas of the business — safety, project management, commercial awareness, environmental, and so on. We’ll soon require many more of these people, so we need a different, smarter approach and to look to other sectors to source them.” He adds: “I hold lunch-and-learn and engagement meetings internally to generate interest, provide insights and change people’s mindset regarding decommis-
Ian Whitehead believes in team collaboration
sioning. We can also use Petrofac Training Services (PTS), who offer conversion courses for people from other sectors.” Whitehead intends to work with PTS to add a decommissioning module to training courses to provide the same insight to new starters to get them thinking slightly differently. “Decommissioning engineering and construction is a much more fit-for-purpose, low-cost engineering that demands a flexible approach,” he explains. So how should today’s graduates, school-leavers and experienced professionals view decom? “We have a 30 to 40 year programme of decommissioning in the North Sea and believe we can establish the benchmarks for deeper water decommissioning globally,” says Decom North Sea’s Nixon. “So individuals have a domestic career opportunity of 30-plus years and an international career opportunity of probably 40 to 50 years.” Oil and gas offers superior rewards for seasoned professionals, graduate entrants and school leaver apprentices. A survey by upstream, exploration and production web portal Rigzone shows average earnings in European oil and gas rose 7 per cent between 2011 and last year and that average annual compensation levels reached $99,683 (£63,492 at December 31, 2012 exchange rates).
the times | Tuesday June 25 2013
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to clean up “My feeling is that the trend will continue,” says Dominic Simpson, head of sales for Rigzone for Europe, Middle East, Africa and Asia-Pacific. Rigzone recently opened an office in Aberdeen and its virtual recruitment events online, and recruitment hosting for oil majors at key industry events, inform its view, says Simpson. “There’s always tremendous demand for engineering disciplines and subsea and there will be even more with decommissioning set to pick up speed and fracking also on the horizon,” he adds. “One thing decommissioning needs to address is image. Work needs to be done on promoting the industry to attract sufficient numbers of students, graduates and qualified engineers to keep up with expected demand that we’re beginning to see.” There are positive signs in academia. Decom North Sea has helped some 30 students with dissertation projects looking at tax, safety, legislative, environmental, economic, human resources and other implications of decom. “There is a growing awareness that this offers very challenging and different career opportunities,” says Brian Nixon. He points to universities introducing modules within oil and gas related degree
courses. The MSc in Oil & Gas Enterprise Management offered by Aberdeen University covers business drivers in technology areas including decom, while the MSc(Econ) Petroleum, Energy Economics and Finance at the university covers the economics of this stage of asset life cycles. The MPhil in Marine Technology at Newcastle University’s School of Marine Science and Technology covers decom from technical and engineering perspectives. “We’re heartened that some offshore operators have now introduced decommissioning into graduate development programmes,” Nixon adds. Decom North Sea is in discussions with OPITO, the Aberdeen based international training organisation for oil and gas, about the development of decommissioning technician qualifications. The UK government has announced support for the establishment by Newcastle University of the Neptune Centre, to deliver subsea and offshore engineering training. This is part of a UK national package of measures that the government in London hopes will support the industry in filling 5,000 jobs over five years. Former military personnel are being targeted for conversion training to fill such jobs.
Recruitment drive now the NORM NORM Solutions is recruiting for its state-of-art Aberdeen facility where scale containing low-level, naturally occurring radioactive material (NORM) is removed from oilfield equipment by using ultrahigh pressure water jetting. Decontaminated components — tubulars, pumps, valves etc — are then reused, recycled or disposed of. Formed as a joint venture between Aberdeen based metal recycling specialists John Lawrie Group and waste management experts Enviroco, NORM Solutions is planning for the anticipated decommissioning boom. “It is a significant additional opportunity for us as well over 90 per cent of offshore structures are steel,” says Ray Grant, environmental director at John Lawrie Group, and director, NORM Solutions. John Lawrie Group recycles or disposes of ‘piece small’ components — subsea equipment such as flexible pipelines and wellheads up to a few hundred tonnes. It receives material, cuts it down to size, cleans it, and reuses wherever possible. Many pumps and valves go back to the oil industry once they have been decontaminated. As one of the largest reusers of steel pipe in the UK, it is the largest
Integrated Decommissioning Expertise Petrofac, your decommissioning partner We aim to support our customers across the entire life cycle of their oil and gas assets, so we’ve made decommissioning a cornerstone of our strategy. We’ve built a dedicated project management and engineering team in Aberdeen with experience of major projects including Brent Delta and North West Hutton – supported by complementary disciplines from across the Petrofac Group. From FEED to training, and from subsea to well engineering – we will support you on your decommissioning journey. To find out more about our integrated capabilities contact us at decommissioning@petrofac.com Project Management
Operations
Heavy Lift
Engineering
Well Engineering
Life Extension
Front End Studies and Conceptual Design
Subsea Engineering
Innovative Contract Models
Training
Ray Grant points to recycling at steel mills around Europe
supplier of steel piling to the construction industry. “Anything that can’t be reused is exported to steel mills around Europe for recycling,” Grant explains. Enviroco, owned by Aberdeen headquartered international oil and gas services company ASCO, adds a pedigree in waste management to NORM Solutions. Scale is concentrated, mixed with cement and disposed of in special landfill sites. The mists from descaling is are also contained and the water recycled. Following work on previous North Sea decom projects, NORM Solutions, John Lawrie Group and Enviroco are involved in discussions with operators and contractors over future needs. “Hundreds of millions of pounds will be spent on disposal,” says
Grant. “Some structures have been out there for up to 40 years, so there will be a large increase in NORM that needs dealing with.” Recruits include NORM Solutions’ operations general manager John Davidson who brought in nuclear industry radioactive waste management skills not readily available in Aberdeen. Davidson’s team has largely been trained internally and includes radiation protection supervisors. NORM Solutions operates an open careers application system collecting interest and CVs from people all the time. “We have key people in place and what we need now to support a growth business are cleaning operatives ,” says Grant. Internal training to add NORM skills to those of Enviroco equipment cleaners is another way to prepare for decommissioning lift-off. “So we’ve got people in the pipeline we can call on,” says Grant. “Business is developing month on month and we see no reason why we can’t also export our capabilities. With the global reach of John Lawrie Group, Enviroco and ASCO, there are exciting opportunities.”
Tuesday June 25 2013 | the times
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Power of Scotland
Skills shortfall
Industry looks to military for line of defence
Ex-Forces personnel are helping to fill the skills gap and the industry is identifying expert jobs for them, writes Ginny Clark
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kills shortage has been an issue for the oil and gas industry for some time but many companies believe the problem is reaching a critical point. Encouraging more women into the sector, engaging and inspiring young people — these are key to ensuring the industry has the expertise necessary to support its progress in the long-term. However, companies recruiting right now are also recognising the benefits of hiring from other sectors, where technicians, engineers, and other staff, may not have realised the potential of their transferrable skills, and a major focus for this are former Armed Forces personnel. Earlier this year Malcolm Webb, Oil & Gas UK’s chief executive, said the industry was working to address the issue of skills shortages, with record investment and a jobs boost predicted over the next 12 months. “Companies frequently cite the skills shortage as the biggest challenge in achieving growth,” he said. “So as an industry we are pulling out all the stops to make sure we have the skilled people required to develop oil and gas for decades to come. Many oil and gas companies are already offering transfer training to people from outside the sector with relevant skills, whether engineers, craftsmen or technicians, so that they can build on their valuable experience to develop the new capabilities the oil and gas sector requires. The industry is also working with the Ministry of Defence (MoD) and the Career Transition Partnership to match industry job profiles with military roles to identify directly transferable positions and to highlight where training and conversion may be required.” The industry’s skills body, OPITO, has pinpointed the lack of transition training to capture transferable skills as its biggest human resources issue, and Larraine Boorman, the organisation’s managing director, has said widening the pool of talent available to the industry is “essential” if employers are to tackle their recruitment problems effectively. Brian McRitchie’s experience highlights how important that transition training can
be. In 2011, after 22 years in the Royal Navy as an electrical engineer, 12 of them spent as a submariner, he was ready for a career change, and he knew exactly what industry he wanted to become a part of. “When I left the Royal Navy, I was similar to a lot of people leaving the Armed Forces, in that we can find it difficult adjusting to some jobs in civilian life,” McRitchie explains. “We’re coming from a strange job in that it can be quite action packed at times, so to leave that for a desk job can become quite boring. The oil and gas industry gives you a bit of that back, as there can be times when you are relying on your skills and experience to make judgments or find solutions, without spare parts, or someone at the end of a phone giving you support. I’m originally from Aberdeen, and have friends who worked in the industry, so I knew I had the kind of expertise that could be transferred.” Knowing what he wanted to do, was one thing, but finding the opportunity was not straightforward. “I found it difficult to make Dr Alix Thom stresses that recruiting from the Armed forces is not new
the transition,” says McRitchie. “Unless you have connections with a company, someone to help translate your CV, then it can be quite a challenge. Some large companies don’t like employing people unless they have direct experience of offshore working. Many ex-Forces people having similar backgrounds and shared qualifications and skills, but sometimes it’s difficult to translate that into something employers understand. “I became proactive two years before leaving the Royal Navy, sending out a covering letter with my CV saying: ‘Here are my skills, are they interchangeable in terms of a job within the oil and gas industry, and if not, any advice about what I should do?’ Some companies ignored me, some said ‘no’, and some gave me good advice about the courses I should follow, which I then applied for through resettlement.” As Electrical Manager at Aquatic, McRitchie, who used to work on computer systems, electronic equipment, sonar, and torpedo fire control systems, now leads a team of on and offshore electrical technicians, maintaining the equipment Aquatic leases to companies in the global oil and gas, telecommunications and renewable energy sectors. He also attends contract
and supplier meetings, and visits offshore projects. McRitchie’s own experience means he understands the hurdles many ex-Forces personnel face — and he also know what they have to offer as employees. “I’ve been recruiting for my own department,” he says. “So I can look at the CVs of Forces people and know how their skills can be applied. The environment ex-Forces people are used to is highly disciplined, with a ‘can do’ approach to work, used to adapting and fixing kit in hostile environments, which can be highly useful offshore. They also bring excellent soft skills such as leadership, and are able to work under pressure, to evaluate and analyse data or a situation. Many people in the Forces are making decisions at a young age that many civilians wouldn’t be able to take in their thirties, which is great experience to bring to bear in an Aquatic team.” As McRitchie’s own experience demonstrates, moving from a career in defence to one in the oil and gas industry is not such a huge leap to make for former Armed Forces personnel, with increasing numbers discovering the potential for their transferable skills and expertise. The Armed Forces are in the middle of a significant restructure: around 5000 jobs have gone from the Royal Navy, another 5000 from the Royal Air Force, and another round of redundancies are under way at the Army this summer, as their numbers continue to be cut from 102,000 to 82,000 by 2017. By contrast, the oil and gas industry is looking to recruit up to 15,000 more people over the next five years.
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owever, Dr Alix Thom, Employment and Skills Issues Manager at Oil & Gas UK, stresses that recruiting exForces personnel is nothing new for the industry. What is different is not just the increased scale of potential, but how O&GUK are working proactively, together with the MoD. “This isn’t a new resource,” she explains. “Companies in this industry have been recruiting from the Armed Forces for many years. The Armed Forces lose around 18,000 people a year anyway, through retirement or career change, quite apart from redundancy. However, as the problems of skills shortages have developed, and the Armed Forces redundancies have come to the fore, we have taken an approach as an industry, and in a strategic way “There will be a lot of people whose skills are transferable, and others whose expertise can be topped up by additional or transformational training. It’s a good fit for us, and we’ve built a relationship with the MoD which we hope will give us advance notice concerning the roles service leaders
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Former Armed Forces personnel recognise that they have sought-after experience but must pinpoint where to use it
hold, so we can look at skills gaps, and how they can be addressed by tailoring training to fit different people. We have some work going on at moment with skills mapping, where OPITO is working on the industry’s behalf with the military, looking at the different jobs available with the industry, and describing the skills without industry jargon. Someone might come out of the Armed Forces as an electrician or an engineer, and we can develop the training that will help them make the transition to this industry. “We’re not alone in fishing this skills pool, but there are certainly obvious benefits to us. The general feedback from companies who employ ex-Forces staff has been very good, highlighting this group of workers as being disciplined, with a good work ethic, and good organisational skills. When recruiting for higher up the career ladder, then commissoned officers’ leadership qualities are well developed. It’s important to stress that only 10 per cent of this indus-
There are a lot of people whose skills are transferable and others whose expertise can be topped up with training
the times | Tuesday June 25 2013
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richard pohle for the times
Targeted recruitment drive One company that decided to remedy its skills shortages with a targeted marketing effort which produced a “phenomenal” response. Aquatic Engineering and Construction Ltd, an Acteon company, has been actively recruiting ex-Forces personnel through the main Forces recruitment offices at Aldershot, Colchester, Portsmouth and Rosyth, in addition to the regional oil and gas job fairs for ex-servicemen and women.
Annette Spedding, is finding a ‘can-do’ attitude
Annette Spedding, HR Business Partner at Aquatic, says the company is convinced that ex-Forces engineers have not only the skillset but also the mindset they are looking for. What has helped in their recruitment drive is already having some ex-Forces staff working within the company, which havebeen helped Aquatic to identify suitable candidates — showing that understanding how skills can transfer is an issue for both sides of the recruitment desk …
“Competition to secure talent is fierce,” says Spedding. “Everybody is looking for the right people, so we reviewed what we were doing in light of the Armed Forces redundancies. “The skillsets of servicemen and women are very much applicable to us. It did help that we had a couple of ex-service personnel already in the company, although we had not set out to recruit them as part of our ‘reel opportunities’ campaign. “However, once on board they helped to identify those skills that were available within the Armed Forces, showing us how this could translate into what we needed “We’ve found this group of people have attractive skills and experience, a ‘can-do’ attitude and and are generally loyal, dedicated and hard working. For us it doesn’t matter where our offshore team live, as long as they are able to get to our marine facility in Peterhead or any offshore location worldwide; if suitably qualified they are the right people for our business. “The response to our advertising campaign has been phenomenal. We’ve been looking in particular at electrical and mechanical engineers, and have recruited mainly from the RAF and the Royal Navy. “We’ve effectively been tapping into a rich resource of talented, motivated, and dedicated people.”
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try’s people work offshore, and we also have severe shortages in onshore roles, so we’re also keen to attract people to areas such as design engineering, drilling, and project management. Supply chain and logistics is another important area. “Overall, what we are trying to do is become more proactive, and not just wait until we get people coming in. We want to identify talent in advance so we can plan and develop transition training programmes, so you have a pipeline of people coming through, which is also more cost effective for everyone. We need a commitment from industry, and that’s now a work in progress. “Also, for some contractors, who might have provided services for both oil and gas clients as well as the defence industry, can take people for whom it might not be so big a jump. One of our member companies explained that if they get, for instance, a mechanical engineer from the military then it’s a question of training them in using different equipment; it might be different materials or different pressures, but the engineering principals are the same.” As Dr Thom points out, skills mapping is an important tool in helping people to understand how their talents might be applied in what may seem like completely different jobs within the oil and gas sector. Andrew Johnstone, head of Industrial Recruitment at Carlton Resource Solutions, agrees, emphasising that helping former members of the Forces to see how they can cross that divide, how they can make a
Andrew Johnstone, says that experience gained onshore can be a good stepping stone
successful switch, is a crucial first step. “Ex-Forces people understand that they have sought-after experience, but it’s about trying to identify where they can step in,” says Johnstone, AIRP Industrial Recruitment Team Lead in Aberdeen. “The areas where skills can be transferred aren’t always obvious to clients, and we also advise them on what they can do to help them stand out from the crowd. “While many ex-Forces clients believe their skills make them ideal for a job offshore, for instance, we believe many clients benefit from gaining experience onshore, learning about different areas of the industry. That can be a good stepping stone, and can lead to companies looking to invest in them in terms of further training or development, rather than the individual having to fund this. “There are more people on the market now. So sometimes people will also have to understand the benefits of working their way up the ladder. A squadron leader might be going in as a technician, although not necessarily taking a wage cut, but have the potential to progress from workshop level.” Johnstone believes supporting clients to find the right niche is crucial to helping them take advantage of the rewards the oil and gas industry has to offer, especially as competition is warming up. “There is no doubt ex-Forces personnel are becoming a larger part of our business,” he adds. “We’ve noticed an increase over the last eight months and they account for around 20 per cent of those clients we placed in the last quarter.”
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