Forget the North Sea, oil is booming in London
London may seem to play a bit-part in the UK’s oil and gas industry but the truth is anything but
“JR is back, JR is back!” squawked the headlines as Dallas made its drawling return to our screens this year.
The eighties hair might be gone but we can revel in the return of Stetsons, plaid shirts, clandestine love trysts in the back of mustangs and of course…oil.
If everybody didn’t know already, the popular TV drama series dramatizes the oil industry in Texan city of Dallas, we all know how that city makes its money. But what about London and oil?
There’s certainly no hint of that liquid gold, and the glamour that comes with it, on EastEnders. But our capital is an important character in the UK’s oil and gas story and it recruits top talent across a multitude of skills. And there is room for yet more.
“In London there are plenty of people on the deal-making side who would have a lot to offer us by transferring their skills,” Ewan Whyte, region manager for Africa, Europe and the former Soviet Union at energy services company Senergy.
“It is probably viewed as quite an unusual move for people to make but it is one that makes sense.”
It certainly does make sense. At a time when many industries are struggling to create growth, the oil and gas industry continues to expand globally and subsequently, strengthen the sector in London.
“The industry is future proof to an extent and this has been proven by its resilience throughout the recession,” argues Ed Allnutt, director, Hays Oil & Gas, the leading recruiting expert.
“Oil and gas is somewhere you can really advance your career and be rewarded for that, there is a lot of job satisfaction and you can really get hold of some big, big projects which you might not see as an engineer in another sector.”
Many of the world’s largest oil and gas companies have offices in London, we may not be pumping gallons of oil out of the Thames river bed but some of the biggest deals in the industry are made here.
“The action is going on all over the world but we have been based here since 1936,” explains Elizabeth Stubbs, Premier Oil.
“Our executive committee is based in London, the functions heads and senior decision makers.”
The buying and selling of fields and the valuation of companies’ assets are just some of the action taking place, in conjunction with the City and its financial clout.
“Experienced technical personnel are needed to understand how much oil and gas can be recovered from a field and what it will cost to get it to market. But that’s only half the story; it is commercial experience and innovation that makes the proposition a reality,” explains Whyte.
“The deals we’re talking about can be worth billions of dollars and carry plenty of risk and uncertainty so the technical due-diligence work performed by expert staff underpins these decisions.
“We think of ourselves as an energy company not an oil company. London deals happen quickly and we have to think on our feet. Transferrable skills are important, just as the same science and engineering expertise is required to develop viable renewable energy or CO2 storage projects; energy projects of all types rely on commercial acumen to make them happen.”
Large companies like Senergy, BP and Premier Oil are also being joined by a growing number of start-ups in the industry; a testament to the strength and lure of the sector as well as London’s infectious entrepreneurial spirit. Although calling them start-ups might be misleading, bootstrapping when launching an oil and gas company isn’t really an option.
“These start-up ventures are quite often backed by millions of pounds as experienced oil and gas veterans group with like-minded colleagues and pick up a license to start exploring,” says Allnut.
“They might have experience in a specific geographical region, prove there are reserves there and go into production. If you look at London’s AIM stock market, there are a number of these businesses being listed; it’s quite a nice business growth tool.”
The oil and gas industry evolves quickly, something which is sure to attract more people to it. A huge amount of R&D capital is ploughed into the business of discovering oil and gas and each year, technologies are improved. This keeps the industry moving at a high pace.
“If you’re an engineer it’s hard not get excited about this sector because of the technology and the scale of the projects,” says Ed Allnut. “You just look at what people are coming up with and designing and it’s incredible.”
Recent studies by Oil and Gas UK have found that after Scotland, south-east England including London is home to one fifth of the UK’s oil and gas workers, around 80,000 people.
“Londoners and London-based companies play a major role in the UK oil and gas industry,” said Mike Tholen, Oil & Gas UK’s economics and commercial director.
“They’re involved in supporting production of our own oil and gas, but also exporting home-grown technology, expertise and oil and gas-specific professional services to provinces around the world.
According to Tholen, investment in the industry is soaring this year to an all-time high of £11.5 billion. So hopefully tens of thousands of challenging, well-rewarded jobs will be sustained in the south-east for many decades to come.
The popularity of these roles for the employees of the oil and gas industry is something which is reflected in the deferment of retirement, a trend noticed by the recruitment industry.
“A lot of senior people at the end of their careers are actively looking for another two or three years of service, not because they need the finance but because they enjoy it,” says Allnut.
“Salary expectation of those nudging retirement age fall as many simply want to continue to contribute.”
My guess is JR would tell us the same thing.