WIRELINE ISSUE 28 SUMMER 2014

Economic Contribution

MAPPING THE SUPPLY CHAIN

Q & A

£35 billion

£11.4 billion

The UK offshore oil and gas industry remains the country’s largest industrial investor, paying more tax into the Exchequer than any other corporate sector £ U K ’ s l a r g e s t i n d u s t r i a l i n v e s t o r The number of companies in the supply chain increased by 290 from 2008 to 2012 290+

Turnover in the supply chain increased by £11.4 billion between 2008 and 2012

The UK upstream oil and gas supply chain generated turnover of more than £35 billion in 2012

£13 billion

42 per cent

Growth in the supply chain is being driven by strong investment on the UK Continental Shelf (UKCS). £13 billion is forecast to be invested in 2014, following a record £14.4 billion in 2013

In 2012, exports made up 42 per cent of turnover in the upstream supply chain

£14.4 billion and a forecast for 2014 of £13 billion. The number of supply chain companies that derive 50 per cent or more turnover from oil and gas increased by 290 from 2008 to 2012.

Q: How did you go about starting this project?

A: We started by looking first at the 3,000 companies or more that are directly involved in the supply chain using a variety of www.oilandgasuk.co.uk

In addition, UK businesses have secured a strong export market. In 2012, upstream supply chain exports accounted for 42 per cent of turnover, a percentage which has remained fairly constant over the last five years.

sources such as Companies House, the FPAL supply chain database and other Trade Associations’ membership lists. EY then narrowed these down to just over 1,500 companies that derived 50 per cent or more turnover from this sector in 2012, on which the reports are then based.

“This growth was driven by strong capital investment on the UK Continental Shelf.”

Q: What does this mean for jobs?

A: The number of people employed by the supply chain in the UK increased significantly between 2008 and 2012, with some 200,000 people directly employed in the UK to support UKCS operations. The majority of companies EY spoke to are based in Aberdeenshire (578) or the rest of Scotland (211). We are also seeing very strong regional hubs, in particular, in the east and the north east of England, which are centres of excellence for the southern North Sea and fabrication, respectively.

Q: How would you summarise the findings?

A: The UK upstream oil and gas supply chain generated more than £35 billion of turnover in 2012. That’s not only significantly more than we had previously anticipated, but data also show that turnover rose by £11.4 billion between 2008 and 2012. This growth was driven by strong capital investment on the UK Continental Shelf (UKCS), which stood at £11.4 billion in 2012, and was at the time, the highest for three decades. This trend seems set to continue with record investment in 2013 of

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