Oil+GasSTRATEGY 2012-2020

Maximising our Future

PRoGRESS REPoRT JunE 2013

Foreword – Fergus Ewing and Melfort Campbell 1

The Oil & Gas Industry Leadership Group 2

Supply Chain – Domestic 4

Supply Chain – International 5

Innovation 6

New Opportunities 7

Skills 9

Industry Place Promotion 11

Case Studies 13

Priorities for 2013/14 16

Contents

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ForewordWhen Scotland’s industry-led Oil & Gas Strategy was launched a year ago, we knew that the sector was in a strong position. Thanks to years of experience built up in the demanding waters off the coast of Scotland, our oil & gas industry is recognised across the world for its innovation, skills and capabilities. Health and safety is a continuing priority issue for the offshore oil and gas industry. The UKCS has a world-class safety regime, built on decades of experience and it has now been adopted as the model for Europe. There is still enormous potential to be safely recovered from the North Sea. Oil and Gas UK have estimated that there are up to 24 billion barrels of oil and gas equivalent which could still be recovered from the UKCS as a whole. These reserves have the prospective wholesale value of £1.5 trillion – ten times the size of the Scottish economy.

The industry in the North Sea continues to go from strength to strength, with an increase in exploration activity. Oil and Gas UK are forecasting a further increase in exploration activity in future years, with over 130 wells forecast to be drilled between 2013 and 2015. This would make the next three years the most active for exploration in the past fifteen years. Scotland has led the way in areas such as subsea, safety, integrity and supply chain management, which has given us a significant competitive advantage on the global stage. This year, as Minister, I attended the OTC in Houston which helped to raise even further the profile of Scotland’s oil and gas supply chain which is already world leading. In the last year I have been engaging with a number of oil and gas SMEs to hear the industry’s acheivements and concerns first hand. For Scotland to continue to capitalise on the full potential of the sector, we needed a clear vision for the industry’s long term future.

The strategy set out to do just that, by highlighting opportunities and detailing key priorities for future action by industry, government and other stakeholders. It focused on maximising resource recovery through industry-led innovation, strengthening our supply chain both here and overseas, and in growing our skills base. The strategy has allowed us to respond directly to industry concerns as seen by the launch in May 2013 of Energy Skills Scotland. This has seen, amongst other achievements, £6.5 million in funding and will provide 1000 new transitional training places to ‘up-skill’ technicians and professionals looking to transfer to work in the energy sector.

Key to the strategy’s success has been that it is industry-led, and the Oil & Gas Industry Leadership Group, which we co-chair, will continue to guide Scottish Government, Scottish Enterprise, Highlands & Islands Enterprise and other agencies on the delivery of the strategy.

We are continuing to work closely with the sector and bodies and organisations such as PILOT, Subsea UK, Oil & Gas UK, Decom North Sea, the Industry Technology Facilitator, OPITO and the Offshore Contractors Association to ensure the strategy continues to align with key issues and priorities. This is very much a live document.

Fergus Ewing MSP, the Minister for Energy, Enterprise and Tourism

Melfort Campbell OBE, Chair of the Oil & Gas Industry Leadership Group

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The Oil & Gas Industry Leadership Group

The Oil & Gas Industry Leadership Group was set up to help drive collaboration across the industry and to agree priority areas and actions to support future development of the sector. Meeting three times a year, the group is co-chaired by Fergus Ewing MSP, the Minister for Energy, Enterprise and Tourism and Melfort Campbell OBE, Chief Executive of the Imes Group. The ILG focuses upon:

• Maximising jobs, exports and the sustainability of the Scottish oil and gas supply chain by increasing capability to:

• Maximise recovery (and value to the Scottish economy) of remaining North Sea Reserves

• Access current and future business opportunities in oil and gas both domestically and around the world

• Recognise and diversify into new opportunities in other energy sectors

The following six priority areas have been identified as central to our objectives and you’ll read about our progress in the next few pages:

• Supply Chain – Domestic

• Supply Chain – International

• New Opportunities

• Innovation

• Skills

• Industry Promotion and Place

To support this strategy, action plans for each of the six strategic priorities have already been formulated, with actions taken, and these continue to be developed.

These set out:

• The detailed actions to be taken forward for each priority

• Who is responsible for driving them forward

• Key timescales and milestones

• The role of the ILG in helping to drive progress

The action plans are shared and discussed at the ILG meetings and regular reports are produced. They include development and assessment of key milestones to support each priority and progress towards outcomes. The strategy remains a live document enabling progress to be monitored and responses made to changes in market conditions.

Since the launch of the strategy in May 2012, the group has welcomed new members from industry, academia and local authorities who have brought with them a wealth of experience and knowledge which, when combined with existing members, has ensured successful delivery of the Oil and Gas Strategy.

As well as discussing progress around the strategy and matters of interest, the group has also met with a number of organisations who are involved in the sector:

• Technology Strategy Board (TSB) stimulates technology-enabled innovation in the areas that should boost UK growth and productivity. It advises government on how to accelerate the exploitation of new technologies. It is an executive non-departmental public body of the Department for Business, Innovation & Skills. Supporting the oil and gas sector since 2007, a Thematic Programme budget of £25m has been allocated to energy projects in 2014/15. The ILG has challenged the TSB to dedicate more resource to oil and gas

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• Oil & Gas UK – The Industry Perceptions Project is a three month campaign designed to promote the importance and contribution of the sector. An outline of the project was presented to the ILG and we are supportive of it

• Remploy – leading provider of specialist employment services for those who face complex barriers to employment. They currently supply the oil and gas industry and others with specialist work wear and uniform PPE and are keen to win more business from the sector

• Business Growth Fund (BGF) provides long-term capital for fast growing UK companies and invests between £2m and £10m in return for a minority stake in a business and a seat on the board, in companies that are typically turning over between £5m and £100m. The BGF has set up an office in Aberdeen to assist investment in the sector

• UK Government – A UK Oil and Gas Strategy was published in early 2013 and there is a significant overlap with the Scottish strategy which reflects the close working between both governments on matters which are of importance to the industry

The publication of the 2011/12 results of the Scottish Oil & Gas Survey of International Activity in May 2013 coincided with the Minister’s attendance at Offshore Technology Conference (OTC) in Houston (6 – 9 May). The Minister led a delegation of over 50 Scottish companies to OTC and provided a valuable opportunity to showcase the best of Scottish expertise and technology to the world. A series of engagements has taken place over the year where there has been positive feedback on the next 10 years of business in the UKCS.

Already we are seeing progress towards the Outcomes in the strategy. Total supply chain sales increased 5.8% in 2011 to reach £17.2bn against a 2020 target of £30bn while international sales have risen by 8.4% to £8.2bn, equivalent to 47.6% of total sales1.

The Oil & Gas Industry Leadership Group will continue to work in partnership with industry, stakeholders, academia and public sector to support the delivery of the Strategy.

For further information on the members of the group, please see www.oilandgasILG.co.uk

Looking ahead, the group will continue to guide the development of the strategy and will consider, amongst others, the following:

• Continue support for deeper engagement with larger companies to understand the future opportunities and how these can link with the rest of the supply chain

• Support the establishment of an Oil & Gas Innovation Centre which would provide a major boost in the drive to speed up the adoption of new technology and improve recovery

• Develop our market knowledge information on our priority international markets to allow focus on matching opportunity with capability

• Work with key partners e.g. TalentScotland to ensure we attract key people to Scotland and ensure that perceptions of the North East and Scotland as a whole as a place to work and live are positive

• Further assess and analyse existing supply chain activity and further supply chain opportunities for the Scottish Supply Chain within the Shale/Unconventional Gas market

• Maintain the exemplary standards of the health and safety regime of the offshore industry

1. Survey of International Activity in the Oil & Gas sector 2011-12 SE/SCDI May 2013

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What we want to achieve: A supply chain increasingly focused on resource recovery, more aware of innovation to drive company growth, and firmly anchored in Scotland

Why: The domestic market must continue to be sustained and developed and will require the industry to maintain and anchor a strong supply chain in Scotland.

Progress

• Following the announcement at the Strategy launch, Scottish Enterprise (SE) is continuing to work towards the account management target of engaging with an additional 100 oil and gas companies over three years. So far SE has engaged with 43 companies of various sizes offering a wide range of services

• This number is on top of the 223 account managed companies in the sector that SE was already working with offering a wide range of services including strategic and leadership advice, research and development support, training and market access support

• We have been working with trade associations and others to identify additional candidates for account management

• The UKCS spends and trends report was published in late 2012 which outlined future project and market opportunity information

• We are furthering relationships with a number of large companies in order to help inform and develop the Scottish supply chain. In addition, this will help us to identify and realise opportunities for further investment in Scotland

• The Scottish Government, the Scotland Office, the Department of Energy and Climate Change (DECC), SE and Highlands and Islands Enterprise (HIE) have

been working together to organise an ‘Access to Finance’ event which takes place in June 2013. This will assist SME’s make informed financial decisions in the growth of their companies

• Since the strategy launch, the Scottish Manufacturing and Advisory Service (SMAS) has liaised with industry to help support the drive towards maximising domestic supply chain efficiency and competitiveness

• Over the last 12 months SMAS have undertaken 22 Manufacturing Reviews and completed 12 improvement projects in the sector, delivering £1.195M

What’s next?

• Operators and contractors will be working with public sector agencies to identify further supply chain opportunities across Scotland and encourage those companies who could be suppliers to the sector but are currently not to get involved in the market

• Examine ways to encourage further sectoral investment in other parts of Scotland to engage in the oil and gas supply chain

• Develop a deeper understanding of the supply chain and combine our relationships with key interventions for maximum impact

• Work as one with Scottish Development International (SDI) and SMAS to continue maximise the opportunities for business growth

Supply Chain – Domestic

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What we want to achieve: For internationalisation to increase at an even faster rate than in recent years, with our knowledge and products deployed in more countries and markets, whilst also ensuring that Scotland remains an outstanding location for investment.

Why: Oil and gas can make a critical contribution towards the aim of the Scottish Government to increase the level of total exports from Scotland by 50% by 2017 with the ILG indicating that 65% growth from the sector over the period is achievable.

Progress

• Scottish Development International worked with 237 companies operating in the oil and gas sector, throughout 2012/13 to develop their business in international markets some of which included companies on high value international projects that are expected to lead to an increase in export sales of £818m over the next three years

• We have expanded the presence of our overseas field offices in key oil & gas geographies including Norway and Canada and more recently we opened an office in Rio de Janeiro, Brazil in order to maximise opportunities in these markets by showcasing Scotland’s expertise

• Scottish companies are already reaping the benefits of these focused resources. One example is Flowline Specialists who are an Aberdeenshire based manufacturer and Rental Company who have recently opened a new base in Norway with the help of our Stavanger office. This follows on from their participation on the Scottish Pavilion at ONS in 2012. They have already won several contracts with major subsea and service contractors in Norway

• We have published “How to Do business” guides which include research on Brazil and Australia, and held events in Aberdeen to provide more detailed information on accessing these markets. A guide for West Africa will be launched later this year as part of the ongoing series

• We have recently completed a global spends and trends report which provides historical and future trends in major global regions. This will be available midsummer

• We have carried out research on global opportunities for the Scottish supply chain in the area of unconventional gas. This publication will be available late summer

• Our annual oil and gas export survey shows growth of 8.4% in international sales from 2011 to £8.2 billion. This was launched at OTC in Houston and gained considerable media coverage

What’s next?

• International presence will expand in 2013 and options are currently being evaluated in the Middle East and West Africa as well as some of the expanding regions in Asia

• Continue to build on Scotland’s excellent reputation in the International O&G market to attract new investment. This will be achieved by targeting global companies and marketing Scotland as an oil and gas centre of excellence

• Build on engagement with existing companies in Scotland to help facilitate any expansion or future investment that can help grow the oil and gas cluster in Scotland

• Continue to host focused trade missions to exploit sectoral opportunities. Target existing as well as new expanding markets across the South American, Africa and South East Asian geographies

• Encourage and support Scottish companies to attend major trade exhibitions across the World. Their attendance together on a Scottish stand will enable them to win new business opportunities as well, demonstrating to the international community the full breadth of Scotland’s capabilities

Supply Chain – International

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What we want to achieve: Clear priorities for innovation, and for priority technologies to be supported and deployed more rapidly to market, to help increase recovery levels in the long-term.

Why: To ensure that technology comes to market more quickly in the future to improve recovery and efficiency.

Progress

• At the Strategy launch it was announced that we wished to support the sector in terms of innovation with funding of up to £10m over three years. In the 2012/13 year, Scottish Enterprise allocated a total of £2.7m to the sector and with additional private sector support leveraged in

• As part of the Strategy, it was announced that a series of calls for research and development and innovation project ideas are to take place over three years. Working with the Industry Technology Facilitator (ITF) the first for ‘Asset Integrity and Reliability’ (now closed) received a number of submissions, and the first awards have been made, and the second for ‘Well Integrity’ is open until August 2013

• An additional innovation specialist has been recruited in Aberdeen by Scottish Enterprise which will help ensure faster consideration of support for companies

• A report has been completed into the possibility of combining the storage of carbon and using it for enhanced oil recovery in some of Scotland’s key oil fields which could generate up to an additional £2.7bn GVA for the economy

What’s next?

The establishment of an Oil & Gas Innovation Centre, through the Scottish Funding Council would provide a major boost in the drive to speed up the adoption of new technology and improve recovery.

• Successful workshops were held, one with industry one with universities to develop a common approach to the centre

• A joint Steering Group of industry and universities was then formed

• A full business case proposal for consideration was submitted in May

• Scottish Enterprise is exploring ways to link R&D and Innovation grants with Oil & Gas operators and major contractors either via the Industry Technology Facilitator (ITF) or directly with operators and/or major contractors

• In particular, an Innovation Norway R&D grant scheme, known as IFU, which has been used by Statoil to jointly support Oil & Gas technology development projects in Norwegian SMEs is being explored in Scotland

• It is anticipated that a further three innovation calls will be run if the outputs from the first three calls continue to merit this approach. If this does proceed, calls 4, 5 and 6 will open in Spring 2014, Autumn 2014 and Spring 2015 respectively

Innovation

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What we want to achieve: For the supply chain to be aware of and actively pursue opportunities in other sectors based upon a clear understanding of where those opportunities lie and where they can add value.

Why: Investment in new opportunities and the application of oil and gas expertise will bring benefits to both the new sectors and the oil and gas industry through efficiency, new markets and improved financial performance

Progress

Decommissioning

• Working with Decom North Sea, a supply chain mapping study was completed to provide greater insight and to realistically reflect a live decommissioning project. This included a SWOT analysis of each of the phases of the decommissioning lifecycle and made recommendations for improvements

• Working with Decom North Sea on an analysis of future industry demand versus capacity

• Decom North Sea has continued to develop the cluster of companies required to achieve a critical mass and deliver high value events to members

• Oil and Gas UK published its annual Decommissioning Insight report which is based on information direct from operators

Offshore Wind

• An operations and maintenance guide for offshore wind has been published as a result of considerable interest in the future potential this offers for Scottish companies. It covers a range of areas from helicopter operations and accommodation to condition monitoring and predictive maintenance including many areas in which the oil and gas industry has extensive experience

Marine

• A report will be published this summer on the long term economic opportunities which marine energy offers for Scotland

• There has been ongoing conversations between Scottish Enterprise and a number of individual companies which have indicated a strong interest in marine energy and want to understand how to build their capability and align themselves to other stakeholders

Nuclear

• A “Meet the Buyer” event was organised which provided more than 100 Scottish firms with an insight into current opportunities in the nuclear industry supply chain and a chance to meet key players in Tier 1 and Tier 2. The opportunities highlighted included in civil engineering, fabrication, construction, waste management, demolition, and manufacturing, engineering design and project management

• Provided 1:1 support for more than 60 SME’s with many more attending a series of workshops and events

New Opportunities

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CCS

• Discussions have been held with Shell and SSE, as well as the Captain Clean Energy Project, about the proposed CCS demonstration projects and how Scottish supply chain expertise, mostly built around the oil and gas sector, can win the maximum amount of business should these projects proceed

• A feasibility study was undertaken to assess the possibility of CO2 being transported to Peterhead harbour by ship and then transported offshore for safe storage. The study results demonstrated that this was technically possible. Since then, a more detailed study looking at how Scotland could become a cluster hub for CCS storage from across Europe, with a hub in the North East of Scotland, is underway looking at a number of technical, industrial, economic and funding issues. This will be completed in the autumn of 2013

• Continue to press UK Government to provide appropriate offers of support for both schemes

What’s next?

Decommissioning

• Assess and take forward recommendations from the supply chain mapping study including key themes of integrated planning, collaboration and bundling, planning and executing earlier, developing talent and resourcing and leverage supply strengths

• Examine future industry demand versus capacity study for potential capacity constraints and address as appropriate

• Continue to work with Decom North Sea to ensure that our supply companies are ideally placed to obtain work within the decommissioning sector

Marine

• The outcomes of the wider Scottish Enterprise report and Crown Estate report on marine energy supply opportunities in the Pentland Firth and Orkney waters will be disseminated to the oil and gas community

CCS

• We will seek to engage with stakeholders, the UK government and the EU to disseminate the results from the CCS cluster study and assess funding options to help develop the Central North Sea as a storage area for European CO2 emissions

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What we want to achieve: To ensure the sector attracts young people and the industry communicates a clear and strong message on future skills needs.

Why: The industry faces increasing competition for skilled staff from other sectors but must be able to attract and retain the best without excessive competition between individual companies and subsequent wage inflation.

Progress

• Developed a short term working group to gather evidence on skills related issues

• Ensured the views and expertise of the oil and gas sector were fed into the Energy Skills Action Group which has now been established

• Contributed to the Oil & Gas UK Skills Summit in autumn 2012

• Held discussions with Oil & Gas UK, Offshore Contractors Association, OPITO and others on the feasibility of using an installation as an onshore ‘proving centre’ to provide offshore type experience for new entrants in disciplines like welding, shot blasting and painting to enable a smoother path to working offshore

• Used our network of companies to support transition training, funded by Skills Development Scotland, being taken forward by Subsea UK and OPITO which will seek to support training of people from other industries to move into Oil and Gas

• Energy Skills Scotland, announced in May 2013, will provide a focal point for contact supported by the wide network of existing skills providers across the energy sector in its entirety to deliver skills solutions now and for the future success of the sector

• Along with £6.5 million in funding, this will also provide 1000 new transitional training places to ‘up-skill’ technicians and professionals looking to transfer to work in the energy sector. It will also establish a gateway to be a one stop shop for energy training and courses in colleges and universities across the whole of Scotland

• To help address skills shortages impacting Oil and Gas and other key sectors, the Scottish Enterprise TalentScotland project is working in collaboration with ACSEF and others to deliver a European careers event aimed at attracting skilled engineers to Scotland. It will also provide immigration information & support services to employers, and to individuals with a job offer from a Scottish company

What’s next?

• Working with partners and other stakeholders to develop a single, authoritative dataset to enable more informed decision making as a result of having a better understanding of the issues

• Ensuring that the views of the ILG are fed into the new Energy Skills Scotland project

• Continued support for the Oil and Gas UK Industry Perceptions project

• Input to and support for Aberdeen City and Shire Economic Future (ACSEF) agenda and strategic priorities and skills

Skills

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What we want to achieve: For Scotland to continue to be seen as the right place to invest and for the importance of the industry to be more widely recognised so that investment in success occurs.

Why: We need to sustain the oil and gas global role by anchoring the supply base for the long term; advising key decision makers and the wider public sector of the continued importance of the industry and the need for further investment.

Progress

• A short film was launched at OTC in Houston promoting the importance of the oil and gas industry, the strategy and providing a strong narrative about the importance of the sector and the long and prosperous future it has ahead

• Following a positive oil and gas debate in Parliament in January, a networking event was held in the Garden Lobby attended by over 100 people including many MSPs, stakeholders and industry representatives to highlight the economic importance and the world leading capabilities of the sector

• Scottish Enterprise Oil and Gas web pages have been revised to provide updated information on the industry, the Strategy and the support and resources available, including information on the ILG

What’s next?

• An adapted version of the film, appropriate to the audience, will be sent to every secondary school in the area

• Work is advanced on a brochure to highlight current infrastructure issues and priorities for the sector and to provide a catalyst for discussing what future actions needs to be taken

• A firm commitment has been made to the Aberdeen Western Peripheral Route/ Balmedie-Tipperty scheme of £745 Million. It is currently anticipated that the contract will be awarded in Autumn 2014 and completed by 2018

• Continue to work closely with Aberdeen City and Aberdeenshire councils, ACSEF, Chambers and the Airport to further promote Aberdeen and Aberdeenshire as great places for the oil and gas industry

• Input into a forthcoming benchmarking exercise to look at the long term requirements for the industry and how we compare to other regions

Industry Place Promotion

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Holders of a brilliant idea and associated IP, but facing the significant challenges of commercialisation and market entry, Aberdeen based Zilift turned to Scottish Enterprise (SE) for assistance in meeting their goals.

Their technology supports the gas and oil extraction process, particularly in later life wells and they recognised a market need for small diameter pumps – negating the need for deployment of expensive drilling rigs. To address this, and similar artificial lift challenges, Zilift developed its own technologies, and focused on their commercialisation.

Early support provided by SE surrounded the development of key product lines. The award of a SMART grant resulted in two new products: TorqueDrive™ for heavy oil production and SpeedDrive™ for conventional oil production.

Further prototypes, and material assistance in development and testing were enabled by support from R&D funding and the Scottish R&D and Innovation scheme.

The Scottish Manufacturing Advisory Service (SMAS) engaged with Zilift during the R&D stage to independently evaluate the pilot of a simple planning tool. SMAS also carried out a manufacturing review, evaluating future requirements and providing further help with remodelling the factory layout to provide a lean manufacturing and assembly area.

The award of an SE mini-capex grant for the first production line will lead to the commercialisation of an artificial lift solution – the company’s first.

Growth plans are further supported with guidance on the acquisition and implementation of a SAP-based business system, training support and guidance on the design and development of the most effective team structure for the company.

Recognising the international market scope for the Zilift technology, Scottish Development International (SDI) has worked with the company to provide networking opportunities and introductions.

Iain Maclean, Managing Director of Zilift feels that the SE contribution to the development of Zilift has been considerable, accelerating the rate at which they have been able to bring their product to market by one or two years, adding:

“There are few areas of the business and its development that have not been influenced by Scottish Enterprise; from product development, through manufacturing and now into commercialisation, sales and marketing.”

Case Studies

The following companies are just some examples of those which have benefited from support from the public sector and Enterprise agencies over the past year. These highlight the innovation at the heart of the oil and gas sector and also reinforces the importance of continuing to grow the supply chain, both domestically and internationally, which is at the heart of the strategy.

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Alba Power, headquartered in Netherley, Aberdeenshire is now the leading global independent for the provision of dedicated support services, to the aeroderivative gas turbine, power turbine, controls and rotating equipment markets.

Employing over 55 experts committed to leading industry excellence through product knowledge, technical ability and customer service. Evidence of this is that they have won the ROSPA Gold Award consecutively over the past two years and were also winners at the Offshore Achievement Awards in 2012.

With purpose-built workshop facilities strategically located to service the North Sea offshore market, Alba Power has also successfully developed the business globally, mostly recently opening a base in Houston, USA through the support of SDI’s Incubator Programme. Now with 50% of sales coming from outside the UK, they now have a truly global footprint across the US, Canada, the Middle East, Australia, Vietnam, Abu Dhabi, Singapore, Europe, India and Indonesia.

In the past 12 months, extensive support has been received through SE, including SMAS, Marketing Expert Help and Leadership training, helping the company increase turnover by 40% to £14m and creating an additional 14 new jobs. Of clear significance to the Alba Power team however is this year’s milestone of overhauling its 200th gas turbine – not only a key milestone in terms of growth and success, but a real indicator of global industry demand and Alba Power’s clear ability to lead supply.

Determination to provide the offshore oil and gas industry with a more effective, higher quality service was the driver for experienced catering industry professionals Peter Bruce and Mike Reilly to take the ambitious step and form Entier in 2008 with Colin Henry and Scott Jackson who worked with Peter at Compass.

The move was bold and revolutionised the business model in its sector.

That innovative approach has continued and explains why the company has gone from zero revenue to over £25.5m in 2012, projected sales of £33m in 2013 and is well on course for a turnover goal of £50m and beyond, with over 430 staff worldwide.

Supported by SE and SDI, Entier has grasped the opportunities of the oil and gas sector, at home and internationally. Clients include the industry’s top operators, drilling contractors and service companies, with contracts located across the globe.

SE has worked with Entier to ensure its strategy is right. From the outset, the company has had a strong focus on staff welfare and SE’s involvement has included support of comprehensive staff development programmes aimed at consistency of quality, whether that be in the company’s bespoke kitchen or on an offshore installation.

Entier – which has won several awards – opened a facility in Singapore in 2008 and last year established its own base in Newfoundland, Canada – their second in the country. As it continues to investigate new markets, (an initiative that SE and SDI have been closely involved with) Entier is about to make a further international move that will position it strongly for key oil and gas markets.

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To that end, SE support has been by way of early market research and market intelligence, introductions to key contacts, support in-country, facilitation of securing premises and guidance on the challenges of setting up in overseas locations.

Established in 2009 and based in Portlethen, Control Valve Solutions (CVS) is a leader in the repair, maintenance and management of control valves and related products for the oil and gas industry to minimize or eliminate platform downtime and reduce customer’s operating costs.

CVS has revolutionised how control valves are supplied to the offshore industry – customers need more than off the shelf products and is why a bespoke valve service has been delivered successfully.

CVS differentiates itself not only through the level of service but the technical expertise of its staff and its own proprietary software – CVS Manager. Over the last 12 months, turnover has increased from over £1.2m to £2.5m with profit increasing by 49%. This has been re-invested into the business to create jobs and train staff, increasing employees from 14 to 21. It has also been used to invest in innovation, enabling CVS to continue to make the business even more sustainable in this highly competitive market.

As a high growth company, continued success has been measured monthly to ensure it fulfils KPI’s linked to sales, production, finance and HSEQ. The introduction of this robust business performance management system has been one of the most critical developments within CVS.

Scottish Enterprise became involved with CVS in 2011 and following a review of their three-year strategy and financial projections, this gave the management team the confidence to move into a new 2,500 square metre facility on the Badentoy Business Park in Portlethen, more than ten times bigger than its old facility and is well positioned to attract, service and retain more clients.

The results of a marketing review commissioned by SE to strengthen the CVS brand was well received by all their stakeholders, clients to employees, and has ultimately increased sales.

Overall, CVS is now in a strong trading position with the tremendous support of SE. There has been a positive impact on sales and job creation, and this trend is set to continue. The support has also significantly improved CVS’ ability to raise the right levels of finance to invest in innovation and growth.

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Priorities for 2013/14

Oil and gas remain our most important sector in economic terms. We have built up an international reputation for high standards in key sectors. We have world class capabilities and existing competitive advantage in areas such as subsea, safety and asset integrity.

The industry’s skills and capabilities also offer the unique potential to diversify, transferring skills and knowledge to other related industrial sectors such as offshore renewables and carbon capture and storage.

It is estimated that oil and gas will play a crucial role in helping to meet the Scottish Governments target of a 50% increase in exports by 20172. Activity will continue to support those companies that are already operating internationally and encourage others to internationalise. Work will also look at new and existing inward investment opportunities, working with the Scottish based management teams and the headquarter bases of potential investors. This includes targeting opportunities in new fast-growing markets, such as West Africa and Brazil, as well as established markets such as Australia and North America.

Oil and gas can contribute to the Scottish Government’s target to boost exports by 50% - however whilst exports of services from the oil and gas supply chain, and exports of refined petroleum from Grangemouth will contribute to this target, the 50% increase is measured excluding exports of crude oil and gas from the UKCS.

• As the UK’s largest industrial investor, the share of UK corporation tax receipts from oil and gas in 2012-13 is forecast to be 14%3. In 2011-12, oil and gas accounted for just over a quarter (27%) of UK corporation tax receipts

Milestones

• Have a greater influence on company performance in the UK and overseas through deeper engagement with companies in the oil and gas sector, including an increase in the number of companies from this sector in our account management portfolio

• Undertake significant trade promotion activities to drive outcomes on further export growth in oil and gas, with a particular focus on new markets, such as Norway, Brazil, Canada and West Africa

• Initiate a significant step change in our approach to innovation and entrepreneurship in collaboration with the Scottish Government, Scottish Funding Council, and Highlands and Islands Enterprise

2. Whilst exports of services from the oil and gas supply chain, and exports of refined petroleum from Grangemouth will contribute to this target, the 50% increase is measured excluding exports of crude oil and gas from the UKCS 3. Office for Budget Responsibility – March 2013 Economic and Fiscal Outlook, Table 4.7

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Scottish Enterprise

Scottish Enterprise is Scotland’s main economic development agency and aims to deliver a significant, lasting effect on the Scottish economy. Our role is to help identify and exploit the best opportunities for economic growth. We support ambitious Scottish companies to compete within the global marketplace and help build Scotland’s globally competitive sectors. We also work with a range of partners in the public and private sectors to attract new investment to Scotland and to help create a world-class business environment.

Oil and gas continues to be a key sector, both for the Scottish economy as a whole and for Scottish Enterprise in terms of future growth opportunities. We remain committed to working with companies across the sector to help them grow.

Highlands & Islands Enterprise

Highlands & Islands Enterprise (HIE) is the economic and community development agency for the north and west of Scotland. HIE’s purpose is to generate sustainable economic growth in every part of the Highlands and Islands. HIE delivers support to significant and growth businesses and social enterprises largely through an account management model. This enables us to target intervention where it can have the greatest impact on growth and productivity.

Scottish Development International

Scottish Development International (SDI) works to attract inward investment and knowledge to Scotland to help the economy grow. It also helps Scottish based companies to trade overseas and promotes Scotland as a good place to live, work and do business. It is a partnership between the Scottish Government, Scottish Enterprise and Highlands and Islands Enterprise and its work is guided by the Scottish Government’s strategy for economic development in Scotland.

Other initiatives include: Smart Exporter – helping companies develop exporting knowledge; GlobalScot – providing practical advice to companies wanting to engage with the global marketplace and TalentScotland – a talent attraction project that showcases Scotland as an outstanding destination to live, work and study.

This document has been prepared by Scottish Enterprise on behalf of the Oil & Gas Industry Leadership Group.

If you require this publication in an alternative format and/or language please contact the Scottish Enterprise Helpline on 0845 607 8787 to discuss your needs.

Scottish Enterprise Atrium Court 50 Waterloo Street Glasgow G2 6HQ

Helpline: 0845 607 8787E-mail: enquiries@scotent.co.uk

www.scottish-enterprise.com

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