Findings from the Chamber’s recent Oil & Gas Transition survey suggest that the UK’s oil and gas sector is pressing ahead with diversification, but skills shortages and concerns over lack of visibility around government funded initiatives could create blockages for net zero ambitions.
COP26 may now be behind us but it has brought into sharp focus the global imperative that is climate change. But interestingly, less than a quarter of firms surveyed believe that the conference has acted as a net zero accelerator, suggesting that this is already work in progress.
This was the 34th edition of the Chamber’s vital biannual barometer of activity and sentiment among operators and supply chain companies based in this region working in the energy sector. And a refreshed report focus looks specifically at the challenges and opportunities facing the sector as it looks to take a leading role in energy transition.
The report covers four main themes. Current trends and future confidence levels. Progress towards diversification. Ensuring the transition is just. And recruitment and skills
When it comes to general industry conditions, the research illustrates a mixed picture, with confidence and activity in the domestic sector trending below levels observed in international markets. However more businesses are now working at optimum levels than in the last survey. And pleasingly, we are seeing large increases in the value of renewables work.
Overall, the sector continues to be positive about the future, with 69% of companies expecting revenue to rise in 2022, double the confidence levels we saw looking ahead to 2020 at this point two years ago. Well over half of firms are forecasting significant jobs growth to support this.
The vast majority of respondents believe that strong sustainability credentials are critical to their long-term success. The survey shows that the industry continues to take its commitments to decarbonise seriously. 80% of firms indicated that strong sustainability credentials were critical to their long-term future.
2% of our sample were class swots, having already met their carbon neural target. A fifth have committed to doing so by 2030. Just over a quarter have not yet set a deadline.
Concerningly 41% have not yet decided on or committed to their carbon reduction strategies. However, this is pretty much in line with other sectors across the country. Reinforcing the Chamber’s policy recommendation that support must be urgently stepped up to enable businesses to understand the journey and take their initial steps.
Three quarters of companies report being either ‘moderately’ or ‘extremely’ optimistic about Aberdeen, Scotland and the UK playing a leading role as a future energy hub.
Respondents expect their businesses to transform substantially across the next decade, with firms predicting that on average, the share of their business outside of oil and gas will jump from 21% today to 47% by 2030.
When asked what factors might act as disincentives to diversify operations, there was a three-way tie in first place between: Generating sufficient return on investment made. Ability to access available funding. And embedding the necessary skills into their organisations.
Companies were actively pursuing solutions to these issues, with 62% investing in retraining existing staff, 47% focusing on graduate recruitment and 31% seeking to rebrand or reposition their company to be more attractive to new recruits.
The research suggests that additional action is needed to support firms in the sector to attract and retain the key talent which will drive the transition.
The report was compiled in partnership with KPMG UK and delivered by the Research Chamber with support from the University of Strathclyde’s Fraser of Allander Institute.
The Research Chamber is an independent research and insight agency within the Chamber of Commerce that helps businesses make better decisions and unlock growth through understanding staff, customers, markets and competitors.
Find out how our team can support your business, visit the website: www.researchchamber.co.uk
To access a copy of the full report, visit agcc.co.uk/research-chamber