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Aberdeen, a City With One Foot on the Seafloor Aberdeen, a City With One Foot on the Seafloor
(about 3 hours later)
ABERDEEN, Scotland — Peter Blake has an American employer, the oil giant Chevron, and his work is global. It is his job to pull together and dispatch billions of dollars’ worth of sophisticated undersea equipment needed for oil and natural gas fields in the Gulf of Mexico and offshore from Angola, the Republic of Congo, Indonesia and Australia.ABERDEEN, Scotland — Peter Blake has an American employer, the oil giant Chevron, and his work is global. It is his job to pull together and dispatch billions of dollars’ worth of sophisticated undersea equipment needed for oil and natural gas fields in the Gulf of Mexico and offshore from Angola, the Republic of Congo, Indonesia and Australia.
So why is Mr. Blake, head of Chevron’s undersea unit, based up here in northeast Scotland? So why is Mr. Blake, head of Chevron’s undersea unit, based here in northeast Scotland?
Because since the early 1970s, when oil was discovered in the British North Sea, Aberdeen has evolved from a fishing town to oil boom town to the world’s center of innovation and execution for the technology that makes the modern offshore energy industry possible. Because since the early 1970s, when oil was discovered in the British North Sea, Aberdeen has evolved from a fishing town, to an oil boom town, to the world’s center of innovation and execution for the technology that makes the modern offshore energy industry possible.
“Scotland has been the home of subsea engineering,” Mr. Blake, himself a Scotsman, said in a conference room in Chevron’s European headquarters on a hilltop overlooking this city and its many dark granite buildings. “The expertise generated by the North Sea continually influences undersea work across the globe.” “Scotland has been the home of subsea engineering,” Mr. Blake, a Scot, said in a conference room in Chevron’s European headquarters on a hilltop overlooking this city and its many dark granite buildings. “The expertise generated by the North Sea continually influences undersea work across the globe.”
That expertise, coupled with a resurgence of investment in natural gas and oil fields in and near the North Sea, means that Aberdeen, a city of 468,000, has been able to nearly escape the economic doldrums that have plagued most of Britain and Europe. Aside from central London, Aberdeen is now the wealthiest place in Britain, with an income per person of about £32,000, or about $49,000. And thanks to the more than 100,000 jobs the oil industry generates in Aberdeen and its surroundings, unemployment in the city and neighboring shires is less than half the 7.8 percent national average. That expertise, with a resurgence of investment in natural gas and oil fields in and near the North Sea, means that Aberdeen, with 468,000 people in the city and surrounding area, has been able to nearly escape the economic doldrums that have plagued most of Britain and Europe. Aside from central London, Aberdeen is the wealthiest place in Britain, with an annual income of about £32,000, or about $49,000, per person. And thanks to the more than 100,000 jobs the oil industry generates in the area, unemployment in the city and neighboring shires is less than half the 7.8 percent national average.
The average pay for each of those oil jobs, at £64,000, is more than double the British average.The average pay for each of those oil jobs, at £64,000, is more than double the British average.
“We’ve got plenty of well-paid people,” said Bob Keiller, chief of executive of Wood Group, a company that traces its roots to an early 20th-century fishing and boat repair outfit that has developed into a global oil services company with more than £7 billion a year in revenue. “We’ve got plenty of well-paid people,” said Bob Keiller, chief of executive of Wood Group, a company that traces its roots to an early 20th-century fishing and boat repair business that has developed into a global oil services company with more than £7 billion a year in revenue.
Aberdeen does not look rich, though it does seem to have a disproportionate number of Range Rovers, Mercedes and BMWs. Its battered waterfront bars with names like Neptune and Character appear to have been little changed by four decades of an oil economy. But the fishing boats have been replaced by big, brightly painted oil field vessels that pull in and out of the narrow harbor entrance day and night. Such is the demand for dock space that the harbor authorities are contemplating construction of a new facility in the next bay. Aberdeen does not look rich, though it does seem to have a disproportionate number of Range Rovers, Mercedes and BMWs. Its battered waterfront bars, with names like Neptune and Character, appear to have been little changed by four decades of an oil economy. But the fishing boats have been replaced by big, brightly painted oil field vessels that pull in and out of the narrow harbor entrance day and night. Such is the demand for pier space that the harbor authorities are contemplating construction of an additional pier in the next bay.
Remarkably, Aberdeen remains a boomtown even though North Sea oil reserves are gradually being tapped out. And yet it is precisely for that reason that this city has become such an innovation hub. New development projects are having to venture ever deeper into more treacherous waters, whether west of the Shetland Islands in Britain or in the Barents Sea off Russia. Aberdeen remains a boomtown even though North Sea oil reserves are gradually being tapped out. And yet that is why the city has become such an innovation hub. New development projects are having to venture ever deeper into more treacherous waters, whether west of the Shetland Islands in Britain or in the Barents Sea off Russia.
For two planned projects, Rosebank off the Shetlands and Alder in the North Sea, Chevron and its partners recently awarded contracts worth £550 million, or more than $840 million. In the case of Rosebank, equipment must work at depths of 1,100 meters, or 3,600 feet, and its surface production vessel must withstand waves 30 meters high or more. The companies winning those contracts included a joint venture of the oil services giant Schlumberger and Cameron International, an undersea hardware specialist; and Aker Solutions, a Norwegian maker of oil and gas equipment. Each has a big presence in Aberdeen. For two planned projects, Rosebank off the Shetlands and Alder in the North Sea, Chevron and its partners recently awarded contracts worth £550 million, or more than $840 million. In the case of Rosebank, equipment must work at depths of 3,600 feet, and its surface production vessel must withstand waves 98 feet high or more. The companies winning those contracts included a joint venture of the oil services giant Schlumberger and Cameron International, an undersea hardware specialist; and Aker Solutions, a Norwegian maker of oil and gas equipment. Each has a big presence in Aberdeen.
As the rest of the global oil industry moves offshore and into deeper and deeper water off Brazil, Africa and the United States, the techniques and technology honed in the North Sea are increasingly in demand worldwide. As the rest of the global oil industry moves offshore and into deeper water off Brazil, Africa and the United States, the techniques and technology honed in the North Sea are increasingly in demand worldwide.
Oil installations in water thousands of feet deep often resemble jellyfish, with a single platform or vessel floating at the top and far below a mass of wellheads, underwater controls, pump stations, piping and processing units snaking along the seabed.Oil installations in water thousands of feet deep often resemble jellyfish, with a single platform or vessel floating at the top and far below a mass of wellheads, underwater controls, pump stations, piping and processing units snaking along the seabed.
Humans cannot work under a mile of water, so installing such equipment calls for specialized ships that can lay pipes and direct robotic submarines that install and maintain the gear. The arsenal includes high-powered pumps and “well trees” — complex arrays of pipes and valves that sit atop undersea wells and regulate the flow of fluids. Humans cannot work under a mile of water, so installing such equipment calls for specialized ships that can lay pipes and direct robotic submarines that install and maintain the gear. The arsenal includes powerful pumps and “well trees” — complex arrays of pipes and valves that sit atop undersea wells and regulate the flow of fluids.
There are “acid stimulation systems,” which can inject chemicals into seafloor wells to increase production. Gas compressors, huge pieces of equipment that keep gas fields pumping, are now being built to go deep under water rather than on land or on platforms. All must be built to resist the corrosion of salt water and withstand tremendous water pressure. “Acid stimulation systems” inject chemicals into seafloor wells to increase production. Gas compressors, huge pieces of equipment that keep gas fields pumping, are being built to go deep under water rather than on land or on platforms. All must be built to resist the corrosion of salt water and withstand tremendous water pressure.
The costs of undersea oil projects can run into billions of dollars because usually the only practical solution is to put most of the gear for a deepwater field on the seafloor, rather than on a platform or on land. Still, “the real estate on the bottom is cheap, compared to the surface,” said Mr. Blake of Chevron. The costs of undersea oil projects can run into billions of dollars because usually the only practical solution is to put most of the gear for a deepwater field on the seafloor, rather than on a platform or on land. Still, “the real estate on the bottom is cheap, compared to the surface,” Mr. Blake said.
This urge to submerge is proving a boon for British purveyors of underwater equipment and services and for their Norwegian counterparts. Subsea UK, an Aberdeen-based trade group, figures that British companies now have about £8.9 billion in revenue, or 45 percent of the global subsea business, which has been growing at an annual rate of 17 percent. This urge to submerge is proving to be a boon for British purveyors of underwater equipment and services and for their Norwegian counterparts. Subsea UK, an Aberdeen-based trade group, figures that British companies have about £8.9 billion in revenue, or 45 percent of the global subsea business, which has been growing at an annual rate of 17 percent.
“We often try new technology in the North Sea. It is a test bed,” said Matt Corbin, chief executive of the subsea unit of Aker Solutions, which employs 2,800 people in Aberdeen. “We often try new technology in the North Sea. It is a test bed,” said Matt Corbin, chief executive of the subsea unit of Aker Solutions, which employs 2,800 people here.
On a warm July afternoon in an industrial park near Aberdeen International Airport, Aker’s engineers were at work on sophisticated electronic control systems for what may be a first: an enormous gas compression unit, 75 meters long. What looks like a railroad bridge will be installed on the sea bottom off western Norway at an oil field called Asgard that is operated by Statoil, the Norwegian national oil company.On a warm July afternoon in an industrial park near Aberdeen International Airport, Aker’s engineers were at work on sophisticated electronic control systems for what may be a first: an enormous gas compression unit, 75 meters long. What looks like a railroad bridge will be installed on the sea bottom off western Norway at an oil field called Asgard that is operated by Statoil, the Norwegian national oil company.
At Schlumberger, the oil services company, drilling experts in the Aberdeen technology center can monitor, via video, the progress of undersea drilling at its clients’ projects anywhere in the world. “Because we run so much technology in the North Sea, we have the ability to look at data and give a sensible answer in other parts of the world, " said Graham Raeper, a Schlumberger engineer, as he pored over a readout with details of a well being drilled in Angola. At Schlumberger, the oil services company, drilling specialists in the Aberdeen technology center can monitor, by video, the progress of undersea drilling at its clients’ projects anywhere in the world. “Because we run so much technology in the North Sea, we have the ability to look at data and give a sensible answer in other parts of the world, " said Graham Raeper, a Schlumberger engineer, as he pored over a readout with details of a well being drilled in Angola.
There may be limits to Aberdeen’s ability to continue growing as an energy hub. Already, some industry executives worry that wage inflation could eventually prompt them to find less expensive locales. And as the region’s offshore energy reserves eventually dwindle, there will be less reason for many companies to have Aberdeen addresses. Aberdeen’s ability to grow as an energy hub may have limits. Already, some industry executives worry that wage inflation could eventually prompt them to find less expensive locales. And as the region’s offshore energy reserves eventually dwindle, many companies will have less reason to have Aberdeen addresses.
But some locals expect the city’s intellectual capital will endure — just as there is a Silicon Valley though little of its business actually involves silicon. “We can be confident the exports will continue,” said Alexander Kemp, an oil economist at the University of Aberdeen. But some locals expect the city’s intellectual capital to endure — just as there is a Silicon Valley though little of its business actually involves silicon. “We can be confident the exports will continue,” said Alexander Kemp, an oil economist at the University of Aberdeen.
For now, at least, the job seekers continue flocking to Aberdeen, whether to the office parks or the oil field equipment factories springing up on what were cow pastures to the west of the city. For now, at least, the job seekers continue to flock here, whether to the office parks or the oil field equipment factories springing up on what were cow pastures west of the city.
“We are in a bubble here,” said John Morrison, a recent architecture graduate who is designing suburban tract housing to accommodate the inflow. “I’d struggle to have a job anywhere else.”“We are in a bubble here,” said John Morrison, a recent architecture graduate who is designing suburban tract housing to accommodate the inflow. “I’d struggle to have a job anywhere else.”