Recommendations

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Given the opportunities and requirements identified in this report, central and local Government, regulators, industry groups and operators need to act to prevent supply chain and skills constraints.

The Oil and Gas Industry Council should oversee the implementation of the following recommendations.

Skills development

  • The UK already has capability for petroleum engineering and geosciences, drilling and completions, and planning approvals and permitting issuance, health, safety and environmental monitoring — but it is constrained, and needs investment to meet the industry’s needs during ramp-up.
  • The UK currently has limited capability for hydraulic fracturing engineers. Lead time to develop an engineer with the right level of experience could be as long as five years, and developing a new training programme could take up to four. There are also already shortages in related offshore and chemical industries, and a risk that these are further exacerbated by the take-off of shale.

Recommendations

The UK Onshore Operators Group (UKOOG), with the support of the Government, research councils, higher and further education institutions, and Oilfield Services companies needs to:

  1. Define a set of standard skills, qualifications and/or accreditations required by operators for staff to work on shale projects.
  2. Define a plan and the investment case to develop required skills at pace.

Existing supply chain

  • There are significant supply chain opportunities for existing businesses in the UK, e.g., steel and cement providers, but not enough is understood about the shale industry’s specific requirements.

Recommendations

UKOOG, with the support of the Government, research councils, higher education institutions, and Oilfield Services companies needs to:

  1. Work with supply chain providers to understand requirements, identifying R&D needs in particular.
  2. Define common pad and hydraulic fracturing standards.
  3. Expand the Fabricators’ Directory to include detailed specifications of components needed for onshore shale development, and work with the Government to promote — domestically and abroad — UK-based suppliers which can deliver these.
  4. Work with existing Government schemes, e.g., the Manufacturing Advisory Service (MAS), to raise awareness of supply chain opportunities for existing businesses, particularly Small and Medium Enterprises (SMEs).

New opportunities

  • Rigs, ancillary equipment and services, and waste disposal, represent a significant opportunity for UK investment, especially as some of this capability already exists.
  • However gaps exist, especially in rig and fracturing equipment manufacture and new technology requirements around waste water treatment and other environmental considerations.
  • Gaps are exacerbated by the need for capital to bridge the gap between the start-up phase and full production.

Recommendations

UKOOG, with the support of the Government, and supply chain companies needs to:

  1. Build an investment case for developing UK-based capabilities in specialised materials and equipment (in particular steel, rigs, hydraulic fracturing equipment) and shared infrastructure (e.g., water treatment, waste disposal, gathering and gas processing facilities) needed to support UK shale. The investment case should include recommendations on bridging finance options to allow the supply chain to invest early enough to deliver on time.

UKOOG needs to:

  1. Engage with the Environment Agency on the types of treatment that would be authorised for re-injection and recycling waste water.

The Technology Strategy Board needs to:

  1. Identify opportunities to develop and deploy new technologies and align support through its innovation programme.

The Government needs to:

  1. Review existing early stage financing options, including inward investment, building on relevant research by the Business Bank.