Aberdeen City Region Deal - weekly progress update 18 January 2016

In the first Aberdeen City Region Deal update of 2016, we hear Opportunity North East (ONE) emphasising the importance to respond, and quickly, to the needs of the oil industry and how the group believes this can be achieved, with a focus on innovation.

At a meeting on the City Region Deal held last week, ONE Chairman Sir Ian Wood highlighted the importance of innovation to the future success of the North East, through the planned Oil & Gas Technology Centre as well as three other Innovation Projects – Biopharmaceuticals; Food, Drink and Agriculture; and Big Data. These projects are vital to balancing the region’s economy.

There is increasing recognition that both the UK public and private sectors have very significantly under invested in offshore oil & gas technology development over the past 15-20 years For example, from the UK Government Innovation spend last year of almost £1bn, only 2% was allocated to oil & gas. The UK offshore industry itself only spends about 0.3% of its turnover on technology development compared to at least 1% per annum in countries such as Brazil and Norway. We now need to look urgently at significantly stepping up our offshore technology development, particularly focused on the key areas of maximising recovery from mature oil & gas fields and minimising decommissioning costs.

The industry has agreed the key technology challenges, the Oil & Gas Authority (OGA) are asking for technology plans for all new fields, and there’s now a mind-set for industry collaboration which hasn’t existed before. The University of Aberdeen and Robert Gordon University are collaborating closely in developing key Centres of Excellence for North Sea maturity.

The OGA, the industry’s Technology Leadership Board, Scottish Enterprise, ONE and our two Universities are working to fast track the ownership, financing, management, control and wide stakeholder participation of the Technology Centre and are applying for significant funds in the City Region Deal process to achieve its successful delivery. Work on urgent Solutions Projects will begin this year and it is hoped the new facility will be in operation by 2019 with an ambition to be a world-class facility, similar to the Advanced Manufacturing facility in Sheffield and the Aerospace Technology Institute. The centre will incorporate full Research & Development facilities, including participation of the Universities, testing facilities, incubator space, Big Data capability and simulation capability.

Between the public and private sectors, £2bn-£3bn could be invested in innovation and technology over the next two decades but the return on this is expected to be at least ten-fold through enhanced recovery. Aberdeen and the North East of Scotland has made its name as a major operations region for offshore oil & gas activities, but it’s only by establishing a strong technology base that we’ll have a chance of retaining oil & gas as a major activity after the North Sea winds down. This is therefore of vital importance.

We have primary industries in farming, fishing and forestry with scope to develop new export markets, technology and added value diversification. Our food and drink sector could double its revenues of more than a £1 billion per annum by the end of the decade through developing its research base, entering new markets and focusing on provenance, health and wellbeing.

Our considerable life sciences expertise often goes unrecognised but is world class. 80% of Scottish companies with therapeutics in advanced stages of clinical trials are based here and we already account for more than 20% of Scottish biotech employment. New research, new products and new companies can all flow from this, given the right investment.

The Big Data Innovation Hub will be a multi-disciplinary centre devoted to researching complex, high-impact problems using big data to support industry and governmental decision-making. The aim is to build research communities, applying big data to problems strategically important to Aberdeen and with global relevance, and use big data to accelerate pre-competitive research in strategic areas, including oil and gas, biopharmaceuticals and agri-food and nutrition. This would form a vibrant innovation pipeline with academia, industry and government, using cutting-edge data science to leverage the development of new products and services.

Aberdeen City and Aberdeenshire councils are continuing to work with the UK and Scottish governments on the City Region Deal proposals to help secure a successful future for the north-east economy.