Oil And Gas Supply Chain Sales Up

27 March 2015, 06:00

Sales from Scotland's oil and gas supply chain grew by 11% in 2013/14, new figures show.

The sector recorded sales of about £7 billion through international subsidiaries, up from £6.3 billion in the previous financial year.

Direct exports from Scotland also grew by 13% over the same period, reaching a total of £4.2 billion, according to figures from Scottish Enterprise.

Combined international sales for Scottish-based supply-chain companies was up 12% to an estimated £11.2 billion while domestic sales rose from £9.9 billion to £11 billion.

David Rennie, Scottish Enterprise's international sector head for oil and gas, said the survey showed the importance of the industry to the Scottish economy but acknowledged it faces a challenging future.

"Although the figures predate the recent sharp fall in oil prices, it's important to highlight that the sector successfully delivered another record performance in 2013,'' he said.

"This is a real endorsement of the industry's world-renowned reputation, built up over 50 years in one of the world's most demanding environments.

"Looking ahead the sector faces some considerable challenges. Cost efficiency and collaboration will be key in helping to address these, as well as focusing on our competitive advantage internationally, in decommissioning and emerging areas such as digital offshore.''

Energy minister Fergus Ewing said: "Despite the recent fall in oil prices and the challenges now facing the industry, this report demonstrates that our supply chain is well-placed to tackle and overcome those challenges.

"Scotland continues to lead the way in the world of oil and gas.

"As a country that boasts a strong engineering and manufacturing skills base which is recognised globally across the oil and gas industry, we have a clear competitive advantage.

"There are huge opportunities open to us internationally and we are determined to make the most of those through continued support and development of our domestic supply chain, enabling it to maintain and strengthen its competitiveness internationally.''

North America continued to be the top region for international sales, followed by the Middle East and Asia Pacific.

Singapore, Qatar, the Netherlands, Iraq and the UAE all joined the top 10 country rankings for international sales during the year.

The survey, sponsored by chartered accountants Johnston Carmichael, combines feedback from 434 businesses employing more than 23,000 people in Scotland.

Graham Alexander, Johnston Carmichael head of oil and gas, said: "2013 was a record year for investment into the UK Continental Shelf (UKCS).

"Not only was there an increase in domestic turnover, but also increased diversification by companies into non-oil and gas activities.

"Although hurdles remain on the horizon, we are committed to supporting companies operating within the oil and gas sector, helping them achieve their long-term vision and ensure that the oil and gas sector recovers from this downturn and retains its reputation as Scotland's most thriving sector.''