Scotland’s Oil & Gas sector achieved ‘record’ supply chain activity in 2013

Scotland's Oil and Gas industry is well placed to meet current challenges as value of supply chain sales reached a new high of £22.2 billion in 2013.

For the first time, Asia Pacific ranks in top three for international supply chain sales


New figures released by Scottish Enterprise show Scotland’s Oil and Gas supply chain delivered a record S$45.3 billion of supply chain sales during 2013, 11 per cent more than in 2012.


The latest annual survey of international activity of the Scottish oil and gas supply chain, sponsored for a second year by Johnston Carmichael, highlights the sector increased its domestic sales to S$22.4 billion from S$20.2 billion in 2012.  International sales rose by 12 per cent to S$22.8 billion in 2013 of which S$8.5 billion came from Scottish based direct exports and S$14.3 billion of sales via international subsidiaries.


As a region, Asia Pacific entered the top three for the first time, achieving S$3.5 billion of international sales. This accounts for 15 per cent of the total international sales in 2013.


Welcoming the results, Energy Minister Fergus Ewing said: “Scotland has established a global reputation within the oil and gas sector and I am delighted to see that these figures once again show the strength of the industry both at home and internationally. Despite the recent fall in oil prices and the challenges now facing the industry, this report demonstrates that our supply chain is well placed to tackle and overcome those challenges.


“Scotland continues to lead the way in the world of oil and gas. As a country that boasts a strong engineering and manufacturing skills base which is recognised globally across the oil and gas industry, we have a clear competitive advantage. There are huge opportunities open to us internationally and we are determined to make the most of those through continued support and development of our domestic supply chain, enabling it to maintain and strengthen its competitiveness internationally.”


Similar to last year, total International activity accounted for a record 50.3 per cent (50.2 per cent in 2012).   Some other key findings from the 2013 survey include:


  • Singapore ranked as the second highest market for international sales, achieving S$3.3 billion.
  • The Middle East, Africa, North America and Asia Pacific are the most reported regions in terms of immediate growth opportunities.
  • Asia Pacific retained its rank as the fourth highest region for growth in the immediate future.
  • 50 per cent of respondents reported the Asia Pacific region as a growth opportunity in the next five years.


Neil McInnes, Head of South East Asia for Scottish Development International, said: “Our annual supply chain survey clearly demonstrates the importance of Scotland’s oil and gas sector to the Scottish economy.   Although the figures predate the current difficult climate, it’s important to highlight that the sector successfully delivered another record performance in 2013, a real endorsement of its world-renowned reputation built up from 50 years in one of the world’s most demanding environments.


“Our survey also highlights the growing importance of the Asia Pacific region to Scotland’s oil and gas supply chain. The fact that Singapore  rose 19 places to become the second most popular country for international supply chain sales reflects the importance of this market for the future of the industry and we continue to see a high volume of enquiries from Scottish companies looking to establish operations and do business here.  Our focus will continue to support positive partnerships between Scottish and Asian companies so we can capitalise on the growth of the Asia Pacific market.”


The survey was conducted in the autumn of 2014 by Aberdeen Grampian Chamber of Commerce. It combines feedback from 434 businesses employing over 23,000 people in Scotland and operating in 137 countries around the world.


Aberdeen Grampian Chamber of Commerce research & policy director James Bream said: “The growth in sales reflects the continuing global demand for the expertise and experience that exists in the Scottish oil and gas sector.


“There are difficult market conditions at the moment, but this research shows that our supply chain is in a strong position to meet these challenges and continue to build on its successes across the world.”


Welcoming the findings Johnston Carmichael head of oil and gas, Graham Alexander, said:


“2013 was a record year for investment into the UK Continental Shelf (UKCS). Not only was there an increase in domestic turnover, but also increased diversification by companies into non-oil and gas activities.


“Although hurdles remain on the horizon, we are committed to supporting companies operating within the oil and gas sector, helping them achieve their long term vision and ensure that the oil and gas sector recovers from this downturn and retains its reputation as Scotland’s most thriving sector.”


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