Reputation in Oil, Gas and Mining 2014: Public perceptions

Public Perceptions of the UK offshore oil and gas industry

Ashley Shackleton, Oil & Gas UK

11 June 2014

Oil & Gas UK – the voice of the UK’s offshore industry

• Leading representative body

• 40 year heritage

• Embracing the whole of the E&P (Exploration and Production) supply chain

• The definitive source of information about the UK upstream

• The gateway to industry networks and expertise

Oil & Gas UK - Strategic Objectives

• Maximise recovery of oil and gas reserves from the UKCS

• Ensure a sustainable long term future for the UK supply chain

• Raise the positive profile and reputation of the industry, highlighting the contribution it makes

Oil & Gas UK portfolio

This afternoon’s objectives

• Why do public perceptions matter?

• What do the public think about us?

• How do we overcome these challenges?

• What are our key messages?

Why are perceptions for the UK oil and gas industry important?

• Politicians listen to the public – they determine our licence to do business

• Now is the moment to tell our story

• Some momentum behind us and a great prize within our grasp

• Creating tomorrow’s skilled workforce

What are the publics perceptions of Oil and Gas?

• The contribution of oil and gas in the UK energy mix is undervalued

• Don’t we import most of it from overseas

• Number and types of jobs available are not widely known

• Long term sustainability questioned

• Safety concerns

• Not taxed enough

• Economic benefits the UK reaps from the sector are undervalued

• Its major engineering and technology achievements are not known

UK Energy: Looking at the big picture

Electricity

Heat

Transport~1/3

~1/3

~1/3

Predominantly

oil products

(also world-wide)

Coal, gas, nuclear,

renewables plus some

inter-connection (F, NL)

Mainly gas, e.g.

80% of homes

Gas is the largest source of primary energy in the UK, followed by oil, then coal

Where does the UK’s oil and gas come from?

The Oil and Gas industry is a major employer in the UK

+36,000 (employed by operating companies)

+200,000 (employed in the supply chain)

+112,000 (in jobs induced)

+100,000 (in the exports of goods and

services)

=450,000

An industry with a long term future

750

280

470

579

670

900

980

990

1090

1670

All Industries

Finance/Business

Education

Offshore Oil & Gas

Wholesale/Retail

Public Admin

Health/Social Work

Manufacturing

Construction

Transport/Storage

Estimated Rate of Reportable Nonfatal injury to workers by SIC Industry Sector, per 100,000 workers

Source: HSE

Non Fatal Injury Rate by Industry Sector- Average 2008/09 - 2010/11

Outstanding HSE performance is imperative

UKCS Fiscal Regime: Current arrangements

Economic Contribution

• A major industrial success

– Recovered 42 billion barrels of oil and gas

– Invested £ 320+ billion

– Paid £ 300+ billion in production taxes and due to pay another £6.5 billion this year

– The supply chain pays around another £5 billion a year in corporation and payroll taxes

The benefit of the UKCS supply chain is felt across the UK

UK oilfield services sector:

• £35 billion turnover

• £14.7 billion in exports of goods and services to more than a 100 countries

• Turnover increased by £11.4bn between 2008 and 2012

• Global leader in sub-sea, deep water, reservoir management and technology, engineering management and project execution

The UK Offshore Oil and Gas Industry Today

Global

Leader

in

Subsea

Britain’s

Best Kept

Industrial

Secret

£14

Billion

pa

ExportsLargest

Industrial

InvestorLargest

Corporate

Tax Payer

Supports

employment

for 450,000

people

Supply

Chain -

Centre of

Excellence

£40 Billion

pa Support

for UK BoTProducing 50%

of UK Total

Energy

Requirement

Lessons learned - summary

• The more people know and understand, the more positive their perceptions of the industry become

• The messages of economic contribution, innovation and skilled, well paid jobs works well in improving industry

• Communicating the facts and human stories of industry shifts perceptions for the better.

• Building relationships amongst stakeholders is important

• Demonstrate the breadth and global expertise of our supply chain

• Tell the story with the theme most relevant to the particular company

• Great history but must be forward looking

BUT

• Energy policy is complicated

• Public find it hard to differentiate between upstream, downstream and utility companies

• Current environment around energy companies is hostile

Our story: The UKCS in 2014

• A challenging province, too often ignored, yet truly a national treasure

• Providing the UK with

– Energy security

– Economic value

– Employment, skills and technology

• A great prize remains …… but cannot be taken for granted

Any Questions ?

Contact Ashley Shackleton ([email protected])