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Scottish oil and gas industry sales hit record high |
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Tuesday, 05 February 2008 |
The Scottish-based oil and gas supply chain industry posted a record level of revenues in 2006, according to a new survey produced by the Scottish Council for Development and Industry (SCDI) in collaboration with Scottish Enterprise.
Strong industry demand due to high oil prices meant that total sales by
the sector rose 10.6 per cent to £12.9bn, more than twice the value of
the entire Scottish tourism industry.
Domestic sales grew by 2.9 per cent to £8.1bn and international
revenues increased by 26.9 per cent to £4.76bn, due to a huge jump in
sales from overseas subsidiaries.
As a result international sales now represent a 36.8 per cent share of
total revenue, the highest ever proportion accounted for by overseas
sales.
The United States was again the top international market, with a
substantial 33.6 per cent rise and sales topping £1bn for the first
time; sales to the USA are estimated at £1.22 billion.
Continued growth in trade with Eastern European markets was noted and
Russia consolidates its position as Scotland’s third most important
market with exports increasing by 74 per cent in 2006 to stand at
£269m. Azerbaijan is the fifth top destination for sales which are now
valued at £175m.
International sales of services also saw continued strong growth, with
an increase of 30.4 per cent reported. These sales account for £3.5bn
of the export total.
SCDI North-east manager Ian Armstrong said: "These latest figures show
the strength of Scotland’s oil and gas supply chain, as the sector
continues to grow its international business significantly. The results
show that Scottish firms can take on the world, and that Scotland is an
important international player in the energy industry, with more than
£1bn of sales generated in the American market alone.
"Ten years ago people were talking about an aspiration to develop a
much greater global dimension to the Scottish supply chain. It is now
clear that the industry is not just truly international in nature, but
also has great potential to grow and develop further. This is
absolutely critical to the long term future of the industry.
"However, the modest increase in domestic sales and the slight decline
in direct exports are worrying. The industry is extremely stretched in
terms of manpower, equipment and resources in handling this volume of
business, and it may well be that the capability to deliver domestic
projects has reached a limit."
Armstrong warned that skills shortages remain a significant constraint
and said it was vital that the oil and gas sector redoubles its efforts
to attract more young people into its fold. "In this regard the recent
launch of OPITO’s Oil & Gas Skills Academy, and the support from
the oil and gas sector for this initiative is to be welcomed.
"The UK Government must ensure that its tax policies encourage
investment in a mature oil and gas basin. The current Treasury review
into the North Sea Fiscal Regime must be fair, open minded and for once
take a long term view of the sector and what tax policies are needed to
sustain its future as long as possible."
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