Collaborative working to transform the sector

Key points:

  • The Oil and Gas Technology Centre is working to deploy new technology to transform the sector
  • Enhancing Scotland’s decommissioning capability through the Decommissioning Challenge Fund
  • Supporting a Scottish location for a deep water port for decommissioning
  • Supporting Carbon Capture Utilisation & Storage (CCUS)

Scotland has been at the heart of the global oil and gas industry for decades, and remains a significant part of Scotland’s economy, worth an estimated £13.3 billion in 2017 and supporting an estimated 109,000 Scottish jobs, many of which are highly skilled.

The sector has faced a challenging few years but industry reports are now showing a growth in investment with a further 5% increase forecast for production in 2018. We are also seeing an upturn in industry confidence. The North Sea still holds significant potential with up to 20 billion barrels of oil equivalent remaining, which could sustain product for the next 20 years.

We established the Oil and Gas Technology Centre (OGTC) in October 2016 with £180 million funding as part of the Aberdeen City Region Deal and are working in collaboration with other sectors to deploy new technology that could transform the sector, drawing in expertise and skills from our universities and colleges.

We are building on these strengths by supporting investment, innovation and diversification across the sector. This includes working with industry on developing subsea-engineering, decommissioning and carbon capture and storage. Decommissioning of oil and gas assets in the UKCS could be worth around £60 billion over the coming decades, with a forecast spend of nearly £17 billion in the next 8 years alone, representing a huge opportunity for Scottish supply chain companies. We are enhancing Scotland’s decommissioning capability through the Decommissioning Challenge Fund, which has been extended with a further £5 million available in 2018/19 to the Scottish supply chain (in addition to the £4.8m awarded in 2017). We have also committed to investing in a deep water port capable of handling the largest structures for decommissioning and Dales Voe in Shetland has been identified as the optimal location for this facility. There is also the potential to repurpose existing offshore infrastructure for CCUS projects, this is the focus of the Acorn CCS project based at St Fergus which could be operational by the mid-2020s. We support the establishment and deployment of CCUS and have provided funding for the recently established North East CCUS (NECCUS), an industry-led alliance to promote the CCUS offering provided in Scotland.

Key resources:

The Oil & Gas Technology Centre

Scottish Government: Oil and Gas

Scottish Government: Decommissioning Challenge Fund (DCF)