The Oil and Gas Industry in Scotland and its regional benefits Lessons learned from Scotland

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1 The Oil and Gas Industry in Scotland and its regional benefits Lessons learned from Scotland Genera Colombia, February 2016 Nicola Sartini, Senior Vice President, SDI Americas

2 Content of today Who we are Story of the North Sea Challenges and benefits Scotland s Oil and Gas sector Offshore in Colombia: how can SDI help

3 Scottish Development International Who we are Scottish Government, Scottish Enterprise and Highlands & Islands Enterprise 27 offices in 15 countries across the globe Colombian market covered from our Hub office based in Rio de Janeiro, Brazil. Full support service: invest, relocate, partner, trade or expand.

4 The North Sea Story How Aberdeen became Oil capital of Europe Before oil was discovered in the North Sea, the North East of Scotland and Aberdeen were relying on industries such as farming, fishing, paper mills and textiles. Strong political will to develop resources of the North Sea was key for a successful development of the oil and gas industry Significant reserves were found in 1969 and first commercial oil extraction in 1975 During the 1970s, intense infrastructure development took place along Scotland s coasts, specially in and around Aberdeen, Peterhead and other ports. (pipelines, platforms, refineries upgrade etc...). Aberdeen was chosen service and operations base

5 The North Sea Story How Aberdeen became Oil capital of Europe During the 1980s, new technologies were developed to meet the new demand for gas and to maximise production from smaller oil fields. Alliances between all stakeholders enabled to develop a sustainable growth of the industry. Demands for skilled workers and technology for the new industry were met by universities and technical colleges through the creation of new teaching, research and development programmes and projects. Local Government authorities were key to: Drive forward the strategy Facilitate engagement with all stakeholders Raise awareness of the scale of the opportunity to local businesses Support local businesses with grants, advices, market intelligence Initiatives to address skills shortages (training providers, colleges, universities)

6 Challenges and benefits of the development of the Oil and Gas industry in Scotland Challenges Land ownership issues Engagement between US oil companies and local businesses was difficult Adapting to change was a significant challenge for local authorities, communities and businesses Benefits Significant contribution towards meeting UK energy growing demand Considerable fiscal revenue over several decades ( 330 bn since 1970s) Creation of hundreds of thousands of jobs (224,000 jobs) Creation of thousands of new opportunities, industries and businesses Infrastructure development Development of a skilled workforce and technological innovations, both being recognised and exported worldwide

7 Scotland Oil and Gas Sector: Facts and figures 224,000 jobs supported by over 2000 companies 43 bn boe recovered from UKCS to date 22 bn boe could still be recovered from UKCS 13 bn GVA equivalent to 8,5% Scotland GDP 22.2 bn Scottish Oil & Gas supply chain sales in bn Capital investment in the sector in 2014 Export to 100+ countries Oil & Gas Academy used by 25 countries Subsea global centre of excellence In 2014, average production of 1,5 million bpd Next big opportunity for the UK and Scotland is decommissioning

8 Scotland Oil and Gas industry key strengths Business Base More than 224,000 are employed by over 2,000 companies in Scotland s Oil & Gas sector Supply of Skilled Labour The Scottish Oil & Gas supply chain creates a diverse range of jobs and attracts the best talent Education and Training Higher education system closely interlinked with the Oil & Gas industry Infrastructure A well developed transport system

9 Research and Development in Scotland The Aberdeen-based Oil and Gas Innovation Centre brings together more than 2,300 oil and gas operators and service companies with 12 Scottish universities and more than 450 academic staff and researchers working on fast-track pioneering oil and gas technologies. The National Subsea Research Institute harnesses the expertise of the University of Aberdeen, Robert Gordon University and the University of Dundee to provide a new dimension to R&D in this key growth area. Aberdeen will be home of the new Oil and Gas Technology Centre as part of a 250 million investment plan for the city.

10 Offshore Oil and Gas industry in Colombia How can SDI help? Share Scotland s experience and some of the public sector initiatives that are key for the sustainable growth of the industry SDI can help the Colombian offshore industry to accelerate its development by bringing latest and more innovative technology companies to the market SDI can develop strategic partnerships with the main players in the Colombian market (National Oil company, public authorities, operators and major contractors) to address their supply chain gaps SDI can facilitate R&D collaborations between Colombian companies and Scottish universities and Innovation centres

11 Thank you. Questions? Nicola Sartini Senior Vice President, SDI - Americas Nicola.sartini@scotent.co.uk