This was presented at the Subsea UK event on the 2nd August in Aberdeen by Sam Gomersall of Pale Blue Dot Energy.

1. Oil & Gas Diversification
Opportunities and Challenges
SubseaUK & Scottish Enterprise
2nd August 2016
Sam Gomersall
www.pale-blu.com

2. © Pale Blue Dot Energy Ltd. 2016
Management Consultants for The Energy Transition
1
Carbon
Capture &
Storage
2
Oil & Gas
Transition
3
Emerging
Energy
Systems
We help organisations of all sizes to create
opportunities and mitigate risks arising from major
changes in the energy markets.
Management consultants for the energy transition
Pale Blue Dot Energy

3. Project outline
 To provide Scottish Enterprise with sector and market
analysis to enable a detailed action plan regarding
diversification opportunities for the Scottish oil and gas
supply chain
 Review 24 sectors
 Map oil and gas capabilities to those sectors
 Prioritise sector potential
 Highlight other diversification aspects
© Pale Blue Dot Energy Ltd. 2016 Management Consultants for The Energy Transition

4. Sectors considered
 Aerospace
 Carbon Capture and
Storage
 Chemical & Life Sciences
 Construction
 Decommissioning
 Defence
 Downstream O&G
 Energy storage
 Food & Drink
 Heat
 Hydro
 Hydrogen
© Pale Blue Dot Energy Ltd. 2016
Management Consultants for The Energy Transition
 Knowledge
 Marine
 Midstream O&G
 Mining
 Nuclear
 Offshore wind
 Rail
 Textiles
 Thermal Generation
 Water
 Wave & Tidal
 Unconventional gas

5. Findings: Priorities
 ‘Green’
 Offshore wind
 Nuclear
 Decommissioning
 Hydrogen
 Heat
 ‘Amber’
 Wave & Tidal
 Chemical & Life Sciences
 Unconventional gas
 CCS
 Energy storage
 Knowledge
 Water
© Pale Blue Dot Energy Ltd. 2016
Management Consultants for The Energy Transition
 ‘Red’
 Hydro
 Aerospace
 Defence
 Construction
 Marine
 Midstream O&G
 Downstream O&G
 Textiles
 Rail
 Mining
 Food & Drink
 Thermal Generation

6. Findings
© Pale Blue Dot Energy Ltd. 2016
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7. Findings
© Pale Blue Dot Energy Ltd. 2016
Management Consultants for The Energy Transition

8. Findings
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Management Consultants for The Energy Transition

9. Mapping summary
Sector with traffic lights Resvr Wells Facilities Subsea Support
1 Offshore wind
2 Wave and Tidal
3 Hydro
4 Nuclear
5 Aerospace
6 Defence
7 Chemical & Life Science
8 Unconventional Gas
9 Carbon Capture & Storage
10 Decommissioning
11 Construction
12 Marine
13 Downstream O&G
14 Midstream O&G
15 Textiles
16 Rail
17 Mining
18 Energy storage
19 Hydrogen
20 Knowledge
21 Food and drink
22 Water and wastewater
23 Heating and cooling
24 Thermal generation
© Pale Blue Dot Energy Ltd. 2016
Management Consultants for The Energy Transition

10. Sectors with subsea activity
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11. Scotland’s Opportunity
 To use O&G ‘surplus capacity’ as an opportunity for
growth
 Consolidate position in Decommissioning and
Offshore Wind
 Develop sector leadership in emerging sectors such as:
Hydrogen, Wave & Tidal, Heat, Energy Storage
 Move from ‘solving a problem’ to ‘creating an
opportunity’
 Engage the O&G sector in the vision
© Pale Blue Dot Energy Ltd. 2016
Management Consultants for The Energy Transition

12. Market challenges
 N Sea production in decline
 Low oil price now, future price uncertainty
 Growth in low carbon sectors
 Transition from fossil fuels underway
 Oil and Gas remains a huge sector
 O&G supply chain unlikely to recover in size
 Need to ensure awareness of the “broader script”
© Pale Blue Dot Energy Ltd. 2016
Management Consultants for The Energy Transition

13. Messaging challenges
 Industry messages are a delicate balance;
 “We need to be pulling together to secure the future for the N
Sea, which still holds billions of barrels of oil & gas” Dierdre
Michie O&G UK
 “Aberdeen is now beginning to face up to the challenges of its
long term economic future after the complacency of a strong N
Sea dominated era” Sir Ian Wood
 Both messages are valid and complimentary
 The diversification message needs to be stronger in
Aberdeen
 ..without being seen as undermining the O&G message
© Pale Blue Dot Energy Ltd. 2016
Management Consultants for The Energy Transition

14. Cultural challenges
 Insufficient drive for diversification
 High oil price: no need
 Low oil price: no capacity
 Poor understanding of other sectors
 Ability to market into other sectors
 Perception of O&G from other sectors
© Pale Blue Dot Energy Ltd. 2016
Management Consultants for The Energy Transition

15. Diversification drivers & outcomes
© Pale Blue Dot Energy Ltd. 2016
Management Consultants for The Energy Transition
Improved value
proposition
Distinctive offering
=>
Business synergies
Growth potential
Decline in current
markets
Loss of revenue
=>
Diluted profitability
Loss of focus
DriverOutcome

16. Strategy precedes delivery
© Pale Blue Dot Energy Ltd. 2016 Management Consultants for The Energy Transition

17. Summary
 Early sector opportunities are in Offshore Wind and
Decommissioning. Also Water and Nuclear.
 Scottish leadership could be established in Wave &
Tidal, Heat, Hydrogen, Energy Storage
 O&G Sector not well engaged with Diversification
 Precipitating O&G Sector engagement is the most
important strategic action
 O&G capacity is an opportunity for business and
Scotland, but it will take time
 Business can get started with preparatory action before
engaging in strategic activity
© Pale Blue Dot Energy Ltd. 2016
Management Consultants for The Energy Transition