Wood review reveals huge potential
The preliminary findings of Sir Ian Wood’s review of the future potential of the offshore oil and gas industry have revealed the capability for an enormous amount of additional investment.
What Sir Ian has identified is how by working together, Government and industry could optimise access to and use of current and future infrastructure in ways that could unlock many currently uneconomic or as yet undiscovered reserves. The operating licences for fields and the ownership of infrastructure are varied and complex, and companies all have different and potentially competing strategies. Yet it would be in their interest to work out how these could be co-ordinated to mutual advantage. Sir Ian estimates that the additional value of the resources unlocked could be at least £200billion.
This report comes at a time when the North Sea is seeing an historic high in investment of around £14billion in the current year – more than any time since oil was discovered.
Good news though this is, it creates its own set of problems. As companies bring forward their design and development plans bottlenecks appear in terms of capacity within the supply chain – for skills and space on yard and fabrication order books and for the whole range of equipment and services.
This has an inflationary affect and may lead to a review of some plans – putting them back or in some cases postponing indefinitely or even abandoning them.
Sir Ian’s review and this bulge could usefully be brought together to help the industry phase development more efficiently.
This would even out inflationary pressures and physical bottlenecks – evening out the flow of work through the supply chain and helping to maximise UK content.
Government and industry have a mutual beneficial interest here and should work closely together to try and achieve on an agreed and voluntary basis the optimum pattern of development.
Philippines disaster will take years for recovery
The disaster that has hit the Philippines has shocked the world. It appears to be the fiercest storm ever recorded in modern times. It ripped through this island nation cutting a swathe over a width of 300 kilometres with winds up to 200 miles per hour.
The death toll is in thousands but the disaster has totally devastated the lives of millions of people, necessitating unprecedented rescue and relief operations and requiring a massive reconstruction venture that will take years.
The Philippines has a population of nearly 100 million but a per capita income of little more than $1500. Clearly the international community will have to help deliver both finance and technical assistance to ensure that resilience is part of the rebuilding effort.
This disaster feeds into the debate on both climate change and the future of development.
The impact of the former will not follow an even path but the overall forecast is that more extreme weather will occur more often, necessitating a growing call on humanitarian funds and adaptation to ensure greater survivability.
The Philippines are not a development partner for the UK, which has focussed its bilateral aid mostly on poorer low income countries (with the exception of Pakistan and Nigeria). Of course the UK is a major contributor to the World Bank, Asian Development Bank and the EU development fund all of which are engaged in the Philippines.
The International Development Committee is currently preparing a report on the future of development finance which will consider the case for establishing a UK development bank. What has happened in the Philippines clearly reinforces the proposal for such an instrument.
In the meantime, the response of the British public to the disaster, as always has been phenomenal giving the lie to those who would try to turn Britain in on itself. The Government is also responding with money and practical support.
Sir Robert faces up to health challenge
Like many people I was shocked to learn that my colleague and neighbouring MP Sir Robert Smith has been diagnosed with the early stages of Parkinson’s Disease. I was not surprised to hear that he was intending to carry on his Parliamentary duties as usual and will be standing for election again in 2015.
I know that Bob had realised something was not right with his health but he was not sure what. Now he knows he can receive suitable treatment and make appropriate plans.
Margo MacDonald has been an active MSP despite having been diagnosed with the condition some years ago and I have no doubt that Bob will carry out all his duties with his usual conscientious and thoughtful attention.