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Offshore oil firms should 'change their mindset'

11 April 10 18:26

Britain's offshore oil industry has to shift its focus from the North Sea so it can be seen as a global business, according to one of its major figures.

Sir Ian Wood, chairman of Wood Group, said the industry in Aberdeen was already thinking internationally.

However, he said the approach in the rest of Britain and Scotland can be "parochial".

Wood Group operates in 50 countries, with 28,000 employees. Only about 20% of its business is in the North Sea.

Speaking on BBC Radio Scotland's The Business programme, Sir Ian said: "There's a need for a changed mindset, for the UK to realise that we must be focused on the medium and long-term recovery as well as the short-term income."

He believes there are at least 12 billion barrels of oil to be extracted, but it could be as high as 25 billion barrels if the economic conditions were right and the technology develops.

The difference between those two outcomes could be around $1,300bn worth of business for the UK, said the industry leader, and the industry and government have to work together to secure that.

Sir Ian said the industry, based in his native city of Aberdeen, is going through a transition.

Having established itself as Europe's oil capital, he insists it should now aim to be the centre for offshore expertise throughout the eastern hemisphere.

He said Britain remains attractive within the industry for its people, skills and quality of life, but added: "People are using the UK as a base to work internationally, but it won't produce anything like the same number of jobs as the North Sea oil does."

Within 20 to 30 years, Sir Ian said Aberdeen should aim to become a global energy centre, using its expertise in renewable and low-carbon energy as well as oil and gas.

The Wood Group chairman, who was chairman of Scottish Enterprise, warned the mindset in Aberdeen has to change away from the hydrocarbons business.

"People are very preoccupied with hydrocarbons, with oil and gas," he said.

"I think Aberdeen hasn't quite realised how fast the offshore wind opportunity is growing. Carbon capture and storage, again, people are aware of it.

"I don't think they're focused enough on it because they're too busy with oil and gas.

"The disadvantage is that people see Aberdeen and think: oil, land, gas, and a bit expensive."

Sir Ian said he remains motivated to keep Wood Group growing.

Philanthropic fund

But he added that he would be disappointed if he has not stepped down as chairman within three years, by which time he will be aged 70.

He is increasingly involved in the Wood Family Trust, set up as a philanthropic fund for anti-poverty projects in Britain and Africa.

The Wood Group was set up by Sir Ian Wood's grandfather, and was in fishing and ship repair until the early 1970s, when the young chief executive expanded into oil industry support and engineering.

Through expansion and acquisition, Wood Group now operates in 50 countries and has 28,000 employees.

Only about a fifth of its business is now in the North Sea. And only about 100 of the workforce are in its management headquarters in a south Aberdeen industrial estate.

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