Oil and Gas Industry Leadership Group minutes: May 2018

Attendees and apologies

Members present

• Paul Wheelhouse MSP, Minister for Business, Innovation and Energy, Scottish Government – Co-chair
• Melfort Campbell, Chief Executive, IMES Group – Co-chair
• Andrew Mennear for Ariel Flores, BP
• Andrew Ritchie for Steve Phimister, Shell
• Andy Hogg, Scottish Government
• Andy McDonald, Scottish Enterprise
• John McDonald, OPITO
• Christine Currie, OPITO
• Colette Cohen, Oil and Gas Technology Centre
• David Brooks for Geir Tuft, INEOS
• Lynn Carter for David Rennie, Scottish Enterprise
• Diane Hill, Skills Development Scotland
• Emma White for Hedda Felin, Statoil
• Jenny Stanning for Deirdre Michie, Oil & Gas UK
• Jim Savege, Aberdeenshire Council
• Gordon McGuiness, Skills Development Scotland
• Diane Hill, Skills Development Scotland
• John Bryce, Awilco Drilling
• Neil Gordon, Subsea UK
• Paul de Leeuw, Robert Gordon University
• Peter Black, EnergySys (Data/Tech)
• Phil Simons, Subsea 7
• Richard Knox, EC-OG (Tech-O&G/Renewables)
• Stuart Payne for Andy Samuel, Oil and Gas Authority
• Terry Savage, Global Energy
• Iain Donald, Enpro (Subsea)
• Trevor Garlick, Opportunity North Sea
• Linsey Wilson, Scottish Government
• Nigel Lees, Wood Group

Speakers

• Gordon McGuiness, Skills Development Scotland
• Jenny Stanning, Oil & Gas UK
• John McDonald, OPITO
• Andy McDonald, SE
• Trevor Garlick, ONE

Apologies

• Audrey McIver, Highlands and Islands Enterprise
• Murdo McIver, Petersons

Secretariat

• Jan Peoples, Scottish Enterprise

Items and actions

1. Welcome, apologies and actions

Melfort Campbell welcomed and thanked everyone for their attendance.

Apologies were noted as above.

The previous minute (ILG meeting 24 November 2017) was approved and taken as an accurate record.

Actions from the November meeting were noted as complete.

Ministerial update

The Minister thanked everyone for attending and for having the opportunity to engage with the ILG.

The Minister pointed out that this forum was one of the most important regular meetings he attends. He requested the ILG to let inform him if there was anything he can do for the industry as he considers this to be a valuable forum. He pointed out that the onus was on all to make the maximum of the opportunity to help industry by what was discussed here. Discussion around behavioural issues, cost, etc, should be maintained going forward. He also pointed out that it was unfortunate that there was no trade union representative at the meeting today. 

The Minister stated that he was looking forward to the presentations. Since the taskforce wound up increasing responsibility has been taken on by partners. The First Minister consulted the taskforce and agreed collectively the ILG would take forward and lead. Much had changed since the taskforce was launched with more positivity for the year ahead. The group can encourage and build on transition and innovation. The supply chain remains the focus of the ILG, which Melfort Campbell would address later in proceedings. Skills challenges would also form part of the discussions. 

The Minister went on to thank those involved in the Underwater Centre and thanked OGIC and the team. The outcome required a wide range of industry collaboration and we now have a world classed innovation centre. This group will be the future for this type of innovation. The Energy Strategy recognises that oil and gas and energy is the largest of the Scottish economy. He expressed his gratitude to all who fed into the Strategy and looked forward to calling on the group’s expertise.

The Minister stated that he looked forward to working with the group.

2. Rationale and focus of ILG 

Melfort Campbell gave a presentation on the role of the group.

Key points included:

• terms of reference (previously circulated) was orientated to the work of this ILG
• this forum helps with the engagement with the Minister
• anchoring the supply chain through Vision 2035, Now UK, Sector Deal, O&GUK, Subsea Decom
• the need now to make this work for the wider industry as well as the supply chain
• the ambition now is to support and capitalise
• overview/action/inform
• what will be done in the future
• long-term and short-term sub groups detailing outcomes needing to be achieved and taken forward. Oriented towards action and informing
• a brief description of how this fits in through MER forum, OGA/MER groups, Industry Leadership Group, Efficiency Taskforce and regional differences from the previous ILG

The following comments ensued:

• too much information out there that is not being captured, for example, similarity, duplication
• exploit maximum opportunities for the sector and other industries
• give the Minister some advice to take away and discuss with colleagues, for example, skills, environmental
• opportunities to engage with other government agencies
• encourage using the Taskforce model to get things done
• tangible goals and targets led by industry
• stronger voice for the supply chain to achieve and attribute towards maximising economic recovery
• how we maximise investing and achieving a competitive environment

The Minister called for action and asked for volunteers to achieve the above.

Action:

• 2.1 Volunteers with regard to the above - All

3. Roundtable introductions

Melfort requested everyone to give a brief introduction. Everyone around the table gave their name, designation, company and a very brief description of what their role was.

Melfort advised that the membership list would be circulated and he would meet with those who were unable to attend.

Actions: 

• 3.1 Send membership list to the group – Jan Peoples
• 3.2 Meet with members who were unable to attend – Melfort Campbell

4. Post taskforce update

Andy McDonald gave a brief presentation on the EJTF. Information on the workstream breakdowns and redundancies were previously circulated.

Key points included:

• background to the former EJTF
• five workstreams transferred to the ownership of SE and partners
  1. retain talent and skills
  2. supporting our people
  3. cultural change and leadership
  4. business resilience
  5. balanced messaging
• infographic of identified organisations that lead the pieces of work

Andy advised that Lynn Carter was taking on the lead for the taskforce work of Scottish Enterprise.

Melfort Campbell suggested a Taskforce sub group be set up to act as a conduit.

Action:

• 4.1 Volunteers for sub-group – Lynn Carter

5. Oil and gas training and skills challenges

Results of OPITO/RGU survey

Paul de Leeuw thanked the group for the opportunity to present. The launch of UKCS Workforce Dynamics Review was rolled out yesterday, 10 May, at a breakfast briefing which had been undertaken by OPITO in partnership with Robert Gordon University’s Oil & Gas Institute.

He had condensed the 6 months study into 6 slides. 

Key points included:

• dynamics playing at the same time. 
• pull for our people from other industries and demand for them from abroad
• energy transition, therefore pull from other sectors
• jobs will change – different elements/tasks
• production likely to decline in the future, implications of fewer people working
• put all in the mix – what is the base workforce
• impact on technology and similar jobs
• workers in industry – direct/indirect
• jobs split, for example, operators, vast majority in the supply chain
• job families - roles in the organisation. Some more critical than others

Paul thanked those who had contributed. 

Paul advised that all details were in the report and online.

Paul continued by outlining three potential scenarios and consequences as follows:

• Scenario 1: Post 2022 – production declining 5% per year. Impact: substantially smaller business
• Scenario 2: Turn Vision 2035 into a workforce scenario. 70% UK workforce will execute work for abroad.
• Scenario 3: Vision 2035 and diversification. Activity: O&G or more diverse energy mix.

Paul added that by 2035 a large number of the current workforce will have retired. These were forecasts, but possible outcomes. This presents a significant opportunity – 40,000 people needed to be recruited, which includes 10% of jobs which currently do not exist. Therefore, planning is crucial on how this is taken forward.

Key next steps:

• need to know the industry is on the right track
• skills strategy is key – speed and change will be different
• work practices different – framework in place to work more flexible
• upskill workforce – mechanisms in place, for example, capabilities

John McDonald thanked Paul for his presentation.

John added that this relies on Vision 2035, and the need to move forward. What are the challenges for industry and government? Complex landscape model should be inclusive. He suggested a strategy group made up of people from this group which will be action focussed. He pointed out that policies and existing industry strategies need to be aligned in the planning and delivery, for example, various colleges. The group will be a single voice to government, a unified voice on skills, capturing what is being done that is similar and what can we do differently. Industry will need to be aligned to formulate a 20-year solution with clear targets. John confirmed he would be happy to be charged with this if he gets the support from the ILG.

The follow comments ensued:

• costs, supply/demand biggest threats
• retention, people want a stronger future, young people may not choose to come into the industry
• message not there for young/new peoples – more focus on energy, not just oil and gas
• transition period will be a challenge, moving new skills from old, management of this will be difficult
• Future Industry Leadership Programme
• young people think differently
• utilise material/tool from the EJTF, for example, STEM

The Minister stated that he was impressed by the work done and if further work  is required, he would like to be informed.

Melfort advised that more conversation was needed, therefore, John will set up a sub group which will involve some the members.

Action:

• 5.1 Sub group to be set up to include some of the ILG members – John McDonald

Transition Training Fund

Gordon McGuiness gave a brief presentation on the role of Skills Development Scotland.

Key points included:

• SDS works alongside funding agencies to connect people into the right kind of training and John and Paul’s work will fit into this
• helps guide training and career through, for example, better curriculum choices
• people helped through:
  • PACE – 5 events with tele surveys afterwards – strong customer feedback
  • loan model (not picked up as well)
  • opportunities for sharing employees, for example, secondments
  • impact on modern apprenticeship programme
  • trying to retain apprenticeship programme. Incentive: £5,000 to adopt an apprentice
  • springboard – more aimed at executive level staff
  • STEM – for those in the oil and gas sector who are looking for a change of career
• TTF has a website to register interest of, for example, type of training. Applications are not always approved, however, there is the chance to rethink
• flow of activities graph – registrations of interest; applications made
• customer feedback is carried out by SDS staff
• residual fund is now small with £2.5m left
• review of delivery model on how to best use the remainder of the fund

Gordon concluded by stating that there were personal challenges in dealing with people in need, however, there was job satisfaction in helping people.

The Minister gave thanks to Gordon and the team. 

6. Sector deal

Trevor Garlick gave an overview of the Sector Deal. He pointed out that this was an evolving document and thanked those involved. Informal feedback had been positive and engagement managed to date has been acknowledged.

Trevor provided an infographic, previously circulated, of the Challenge Fund. Key points included:

• three projects:
  1. transformational technology
  2. underwater centre
  3. decommissioning
• five themes:
  1. people and skills
  2. culture and behaviours
  3. carbon capture usage and storage
  4. international and export growth
  5. improving efficiency and productivity
• all need funding
• massive value potential in this industry, both in jobs and barrels

Trevor concluded that 16 institutions will be invited to get the Underwater Innovation Centre underway. It is multicentre and across the UK – 9/10 Scotland, 6 North East England.

Melfort thanked Trevor, acknowledging that there was much still to be achieved.

7. AOB and date of next meeting

Andy McDonald added that he would share the list of SDI energy events included in the Energy Operation Plan for 2018-2019 with the group.

The Minister stated that he had found the meeting helpful and gave thanks for the effort put in by the presenters. He thanked everyone for coming together at the new ILG. 

Melfort requested a set cycle of dates for the next meetings.

Melfort thanked members for their attendance and input.

Actions: 

• 7.1 List of SDI International Market Plans to be circulated to the group – Andy McDonald
• 7.2 Dates for the next meetings to be set – Linsey Wilson

Oil and Gas Industry Leadership Group