Air Connectivity Important for Energy Sector to Rebound

The oil and gas industries are synonymous with this part of the UK and important stakeholders in the industry highlighted this at a special Routes Europe Energy Brunch at the headquarters of the Wood Group in central Aberdeen on April 12, 2015.

Airline delegates at this year’s Routes Europe were able to learn the important role they could play in supporting the strong energy sector in North East Scotland by introducing new flights into Aberdeen International Airport.  The oil and gas industries are synonymous with this part of the UK and important stakeholders in the industry highlighted this at a special Routes Europe Energy Brunch at the headquarters of the Wood Group in central Aberdeen on April 12, 2015.

While acknowledging the current challenges faced within the energy sector, industry experts highlighted how the energy sector will continue its importance to the region, as Europe’s Oil and Gas Hub, also providing a broader understanding of Aberdeen’s role in its future.

“Aberdeen International Airport has provided an invaluable link to the rest of the world for our industry for the past 50 years and has played a vital role in facilitating its growth,” explained Alastair Green, group head for strategy and development for Wood Group.  “Connectivity is essential to support the sector and the many people working within it.”

Airlines may be celebrating the reduction in the cost of fuel, but the energy sector is feeling the heat from the cost reduction as the average price of a barrel of oil has fallen by around 50 per cent in a short period of time.  The impact this could have on the sector has been well recorded, but Green confirmed that with a cyclical industry the situation will change to the benefit of the energy sector.

“We have been here before and survived.  We have been in another downward cycle and it is not a nice place to be.  However, we are confident we will emerge from this cycle in a better standing as a much fitter and stronger industry,” said Green.

In fact in a previous downturn the price of fuel fell as low as $5-10 a barrel in the mid-1980s, making the current rate of just over $50 a barrel seem little more than a minor blip.  “This was a doomsday scenario in 1986, but we now see Aberdeen is home to largest number of multi-millionaires per capita in the UK,” said Green. 

“The energy sector certainly helps Aberdeen punch well above its weight.  The city retains a small, close knit community.  It is often said that despite its growing population that Aberdeen is like a village.  That is effectively true,” he added.

Oonagh Werngren, operations director for Oil & Gas UK said air transport will play an important role long into the future in supporting the Oil and Gas sector in North East Scotland.  “It is not just about flying in and out of Aberdeen, but the connectivity the airport provides directly to offshore rigs.  We are home to the biggest heliport in Europe with around 12,000 to 16,000 people offshore at any one time, depending upon the season,” she said.

Werngren, a regular air traveller in her role called on airlines to further enhance connectivity into Aberdeen, but necessarily into international markets, but just within Scotland.  “I firmly believe we should reconsider flights between Aberdeen and the cities of Edinburgh and Glasgow.  Our capital city is rising in importance but remains a three hour journey from the North East coast by road,” she said.

The energy sector certainly comes with its benefits for Aberdeen International Airport, where around 65 per cent of passengers are travelling on business.  As many in the energy sector joke: “there are longer queues for business class check-in than for Economy”.  This makes Aberdeen International Airport a “unique proposition” to airlines,” said managing director, Carol Benzie.

“We have something very different at Aberdeen and are looking at how best we can solve our market requirements, particularly the Houston conundrum, a market of around 50,000 passengers a year.  We may not be able to offer non-stop flights to such markets as Luanda, Angola; the Congo or Equatorial Guinea, but need to ensure we minimise downtime connecting at airports as our energy travellers are valuable commodities and downtime is lost business time.”

It is almost 50 years to the month that Shell first set up a base in Aberdeen after Ian Wood, a third generation member of the Wood Group had his ‘Eureka’ moment on a flight while returning from an oil conference in Houston that Aberdeen should move away from its fishing and marine engineering businesses to become Europe’s answer to the US city.  It was 1969 that the first oil discovery was made and 1975, forty years ago, that it arrived onshore for the first time.

Initially the UK Government had set a target of ten billion barrels of oil but already 43 million barrels have been excavated with a further 23 billion barrels in the North Sea, but require an estimated £1,000 billion to reach them.  “The North Sea is not dead,” said Alistair Green.  “The future is bright, even if it is a little cloudy right now,” echoed Oonagh Werngren.