IN NORTH-EAST Scotland, we have been very fortunate to benefit from a booming oil and gas industry, and supply chain companies haven’t needed to consider cross-sector collaboration to thrive.
But as we are all well aware, times are changing and working with other sectors ought to be top of the agenda.
Diversification strategies can help organisations manage the long term decline in oil and gas, driven by price uncertainty and the low carbon transition.
Organisations need to wake up to the opportunities that diversification offers and invest time and effort to prepare, plan and deliver a diversification strategy.
Cross-sector collaboration should be prioritised for oil and gas businesses if Scotland, particularly the North-east, is to continue to grow and thrive.
Diversification is about much more than selling existing products into a different sector and organisations need to research and develop a diversification strategy.
At first glance, the North-east may not appear well-equipped for working in other sectors given the focus on oil and gas, but many of the critical components for global leadership in the low carbon energy space are already second nature to the oil and gas supply chain: innovative technical and engineering solutions to new challenges and working as part of a diverse (geographically, culturally, skilled) team.
The oil and gas industry holds the essential skills to diversify, having endured periods of low prices and uncertainty over the course of its life.
Businesses have emerged the other side evolving into stronger, more efficient and innovative organisations.
The primary difference this time is the low carbon revolution.
Now is an ideal time to establish a position in the emerging, high growth, low carbon energy space.
Whilst not always apparent inside the oil and gas “bubble” - the world is in an energy revolution of which the current low oil price is just a small part.
We are in the midst of a transition to a low carbon economy.
We recently completed a study for Scottish Enterprise, exploring the opportunities for the oil and gas supply chain to diversify, considering 24 sectors and the potential and expected scale of growth in each sector.
The study identified early diversification opportunities in offshore wind and decommissioning, both of which have direct crossover of existing oil and gas services.
Other opportunities exist in nuclear, water, wave and tidal, CCS, hydrogen and heat sectors.
If Scottish oil and gas supply chain businesses engage with the diversification opportunities in these areas (and others), businesses can exploit the business potential in these high growth sectors.
Cross-sector collaboration can ensure Scotland’s future position as a global leader in energy projects and services, and become world leaders in low carbon energy as well as leaders in the oil and gas industry.
Time for action?
That time is now.