Suppliers urged to make green move

9 May 2001
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10 May 2001 | Robin Parker

Suppliers in the UK oil and gas industry should diversify into the renewable energy market to help them achieve the government's goals of £1 billion in annual new business for the sector and generate 10 per cent of electricity from green sources by 2010, according to two new studies.

Sustainability through Diversity, from the oil and gas industry's taskforce Pilot, identifies the rapidly growing market for wind and wave generation projects as areas for diversification. Design, drilling and installation technologies are similar for all projects, the report noted.

The report says that wind tower manufacture alone could make up a fifth of the costs of the 40,000 onshore wind turbines that could be installed globally within a decade. It also predicts that supply management openings will be worth £34 billion a year by 2004, with about 40 per cent outsourced.

More than 70 suppliers were questioned for the report and 71 per cent were considering diversification. Sarah Kydd, the study's co-ordinator, suggested this was a reaction to the recent volatility in oil prices. Companies in the sector should not abandon it, she said, but try to "complement their core businesses".

A survey for the second study, Oil & Gas Environmental New Business Opportunities, found that oil and gas consultancies were least likely of all parties in the supply chain to have diversified into environmental areas.

The report suggested companies providing environmental products and services should be treated as a separate group. "The aim is to segment the oil and gas sector into distinct areas so we can meet specific interests," said Angela Latta, study co-ordinator.

The reports have been sent to 6,000 suppliers for feedback to help draw up a formal strategy this summer.

SMmay2001

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