Knowledge Centre
Supply Chain
Introduction
A vast wealth of expertise and technology has been developed in the UK alongside four decades of oil and gas production. These oilfield goods and services now enable the extraction of the country’s oil and gas reserves but are also in increasing demand in provinces around the world. In some areas, such as subsea engineering, the experience gained in the UKCS now means the sector is regarded as a global leader.
The supply chain is involved in the design, building, operational and decommissioning phases of offshore projects. It provides expertise to oil and gas producers in the areas of exploration and appraisal, reservoir management, wells/drilling, facilities, health and safety, environment and decommissioning.
The related organisational range is vast – covering onshore and offshore contractors, suppliers and service providers, consultants and specialist advisers through to the end user clients (integrated majors and independent operators). Significant business flows exist to other non-core sectors that are necessary to support the sector.
Key facts
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Over the last forty years, exploration and development of the UK’s oil and gas reserves has created a supply chain with an unrivalled range of products, services and expertise.
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The capability of this supply chain continues to grow as the UK develops new fields in increasingly deep waters and faces the challenges of extending the operating life of many mature assets in one of the most demanding oil and gas provinces in the world.
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Today, the supply chain provides to exploration and development companies goods and services for reservoirs, wells, facilities, marine and subsea activities as well as support services.
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The Industry's Technology Facilitator (ITF) identifies needs and facilitates the development of new technology to meet those needs through joint industry projects with up to 100% funding available for promising solutions. Since its creation ten years ago, ITF has helped oil and gas producers, service companies and technology developers to work collaboratively, developing 137 revolutionary technology projects.
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Annual turnover of the supply chain is ~£16 billion (~£11 billion in domestic sales and £5-6 billion in exports).
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In 2008, some 450,000 jobs throughout the UK were supported by the servicing of activity on the UKCS and in the export of oil and gas related goods and services:
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The exploration for and extraction of oil and gas from the UKCS accounted for around 350,000 of these; this comprised 34,000 directly employed by oil and gas companies and their major contractors, plus 230,000 within the wider supply chain. Another 89,000 jobs were supported by the economic activity induced by employees’ spending
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The thriving exports business is estimated to support a further 100,000 jobs
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The scale of the supply chain means it contributes £5-6 billion per year in corporate and payroll taxes and national insurance.
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UK exports of oil-related goods and services have been estimated at more than £5 billion a year in value, reflecting how well established the UK’s supply chain is internationally. The competence of its people and the quality of its technology, particularly subsea, are very much in demand in oil and gas provinces around the world.
