Almost half of North Sea operators and contractors are concerned about diversification and energy transition and are working to reduce their carbon footprints or develop low carbon solutions, according to an industry survey.

The findings of a joint research put together by the Aberdeen & Grampian Chamber of Commerce in partnership with the Fraser of Allander Institute and consultancy KPMG in the UK revealed that 52% of respondents report an increasing demand for their products and services in non-oil and gas projects.

While 49% of those surveyed reported working to reduce their carbon footprints or develop low carbon solutions, 11% said they were planning no further diversification, according to the 31st Oil and Gas survey, which represents the views of 90 companies employing 55,000 people across the UK.

A total of 86% of companies surveyed expressed some likelihood of engaging in decommissioning activity in the medium term, the highest result since the question was introduced in 2010.

“The survey also shows the highest proportion of contractors since 2016 indicating expected involvement with renewables work in the near future, showcasing the changing nature of opportunities across the supply chain,” the survey revealed.

Martin Findlay, office senior partner and tax partner at KPMG in Aberdeen, said: “We may not return to the periods of high growth witnessed in the oil and gas pre-downturn but the survey suggests the sector is resilient, confident and prepared for long-term, sustainable success.”

The North Sea has previously been praised as a leader on energy transition as an increasing number of low carbon solutions grow in prominence in the mature basin, consultancy PwC and trade association Oil & Gas UK (OGUK) ahve said.

Already, three of the world’s largest oil and gas companies — BP, Shell and Total —are carrying out conceptual studies into a potential large-scale project to power UK central North Sea platforms with green electricity.

The scheme would involve power being cabled over the seabed for long distances, with supply from Norway among the options, as well as domestically produced electricity and power from UK offshore wind projects, Upstream understands.

Shane Taylor, research and policy manager at Aberdeen & Grampian Chamber of Commerce, said: “It’s clear that the energy mix in the future will be far more diverse and for our existing supply chain there’s huge opportunity to be seized from diversifying into new markets and sectors proactively.”

For example, Italy’s Saipem was recently awarded an engineering, procurement, construction and installation contract from French company EdF Renewables for the construction of the 450MW Neart na Gaoithe wind farm off Scotland.

Marking Saipem’s first turn-key project in the offshore wind farm sector, the company said it will use its crane vessel Saipem 7000 for the offshore installation activities.

Announcing the job, Francesco Racheli, chief operating officer of the Saipem E&C Offshore Division, said: “This important achievement has been made possible thanks to our capabilities and expertise in engineering, fabrication and installation as well as to our assets, particularly suited to projects of this kind.”

However, the industry survey also revealed that of those companies that have considered potential diversification, 34% flagged concerns around profitability and return on investment as the main barrier, closely followed by 31% of firms citing experience and skills within the organisation as a barrier.

“Some of the big issues, particularly talent attraction and the energy transition, will benefit from a collaborative approach to showcase where the industry is actively taking action,” Taylor said.

“Around 50% of firms indicated that they have strategies in place which outline targets to reduce their emissions or explore low carbon solutions. Proactively pursuing these strategies, and demonstrating real success, will be key in engaging the talent the industry needs to continue to contribute to the UK’s energy security for decades to come,” he added.

Low Carbon

Almost half of North Sea operators look to transition to cleaner energy