THE oil and gas industry is one of Scotland's biggest success stories, supporting more than 200,000 jobs and generating £8 billion worth of international sales to more than 100 countries annually.
There are many companies who look with envy at the wealth generated by the oil and gas sector in Scotland, not realising there is potential for other sectors to expand into this lucrative market, particularly in the supply chain.
In Sir Ian Wood's recent review of the oil and gas recovery regulations, one of the eight commitments he sought was recognition of the significant value of the supply chain. Scotland's domestic supply chain is the most important industrial sector in Scotland with an estimated 2000 companies in this area producing domestic sales of £9bn in 2010/11.
The good news is there is potential to grow this important market even further and one route is to encourage companies currently operating outwith the supply chain to engage with the oil and gas industry.
Current optimism is very high. Although we have seen oil and gas produced from our shores for almost 40 years, recent estimates suggest there are at least another 40 years of activity left in the UK Continental Shelf (UKCS) with an estimated prize of 24 billion barrels of oil equivalent, with an estimated value of £1.5 trillion still up for grabs.
The investment opportunities remain considerable. A recent report from Scottish Enterprise on trends in activity on the UKCS suggest a total of £44bn of capital expenditure could be invested in 86 new fields and redevelopment of current fields by 2016.
These include the £2.5bn development of the Laggan and Tormore fields west of Shetland as well as investment in existing fields such as Forties and Schiehallion. New contracts for these and other projects offer significant opportunities to supply chain companies and the expertise forged in the challenging environment of the North Sea is in demand worldwide in countries with nascent oil and gas industries such as Australia, Brazil, Mexico and Africa.
Fortunately, Scotland is home to many vibrant and innovative companies in other sectors capable of making a significant contribution to winning such business. These include aerospace, defence and marine engineering, life and chemical sciences, construction, advanced computing and manufacturing. Many companies flourishing in the oil and gas market have diversified from other sectors.
The National Collection of Industrial, Food and Marine Bacteria provides specialist microbiology and chemical services to a range of clients in the pharmaceutical, food, environmental and oil and gas sectors. Angus-based Wilkie Offshore grewn out of a traditional industry, in its case textiles, to develop specialist engineered textile solutions specifically for the oil and gas market. The Galloway Group can trace its origins back to the 1870s when the company started trading as tinsmiths but today the Dundee firm produces sheet metal and ducting for a range of industries including oil and gas.
It's also worth remembering the Wood Group started life as a ship repair and marine engineering firm servicing the fishing fleet until the 1970s, when it shifted its focus to the burgeoning oil and gas industry.
Maritime Developments followed a similar path, starting out in 1999 supplying equipment to the Peterhead fishing fleet, but after spotting an opportunity in the fast-growing subsea sector it has been able to expand into Aberdeen and double its workforce.
These are just a few of the companies that have looked beyond their sectoral niche for commercial opportunities. Far from the sunset industry predicted, oil and gas has been given a new lease of life and there are still plenty of rewards for Scottish companies willing to embrace the significant opportunities in the oil and gas supply chain.
l Scottish Enterprise's Access to Oil & Gas events will be held on November 28 at the Apex Hotel, Dundee, and December 9 at the Radisson Blu, Glasgow.
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