OGV Energy sat down with Stuart Broadley, Chief Executive of Energy Industries Council, the UK’s largest energy trade association, to discuss export opportunities in the new COVID world.
Q1. The EIC is a global organisation with offices in London, Dubai, Rio de Janeiro, Houston and Kuala Lumpur. How has COVID-19 affected your business?
Like every business, we had to act quickly to protect our employees while complying with different national lockdown regulations, all while ensuring business continuity to the best of our abilities.
The biggest disruption was to our events, which quickly had to change from being physical to virtual. The team went above and beyond and by the end of August, the EIC and our partners will have run more than 60 webinars to a global audience of over 6,000 delegates.
Our core membership offering, our market intelligence databases (EICDataStream, EICAssetMap and EICSupplyMap) can be accessed from anywhere in the world with unlimited users for each member company, so there has actually been an uptick is usage over the past six months, with home-bound members finding it a productive use of their time.
In a testament to the value that we provide for businesses, we’ve even seen an increase in the number of new members joining the EIC compared to this time last year, which shows companies are taking more steps to actively find their next business opportunity.
Q2. Exports were covered as one of the growth strategies used by your members in your recent EIC Survive & Thrive report, what were the findings?
Now in its fourth year, the EIC Survive & Thrive insight report studies the growth strategies companies use in a market crisis. While diversification across energy sectors was found to be the most used growth strategy, developing new export markets was disappointedly the least used for the fourth year in a row.
Typically our members earn 60% of their revenues from exports developed in good times, so it’s quite telling that during tough times companies aren’t willing to take the risk of entering new markets but are more willing to innovate, differentiate and diversify their way out of challenging market conditions.
The interviews for this research were done in the context of a tough market, so naturally business owners looked at how to get fast returns on investment when struggling for cash and higher margins, but 97-98% of energy opportunities are outside of the UK so the EIC would really like to see more companies looking abroad to generate more growth.
Q3. Where do you see the best export opportunities right now?
As a result of the coronavirus pandemic and the pressures of low oil and gas prices, at least 30% of all global energy projects have been delayed. Using our CAPEX project tracking database EICDataStream we continue to support our members to focus on those projects that are still going ahead.
We are also supporting the oil and gas authority in their supply chain and exports task force, by providing them with a list of 146 live projects specifically to help the UKCS service sector with new export growth.
The 146 projects are comprised of 85 oil and gas projects with a combined value of $720.6bn. Australia, Brazil, Indonesia, UAE and USA occupy the top five countries in this list for the next oil and gas opportunity.
In offshore wind, there are 61 projects with a combined value of US$154.2bn that are going ahead and offer attractive opportunities for the UKCS supply chain, this time in very different regions including China, USA, France, Japan and Germany.
Q4. You have had to go virtual for the Energy Exports Conference this year, what can we expect from the new format for this event?
The inaugural Energy Exports Conference took place last year as a collaborative project between the EIC, British and Scottish government and a number of other key partners and saw over 1,000 attendees over the two days including 350 separate British supply chain companies.
This year the conference will be free to everyone and fully virtual, connecting thousands of energy professionals, supply chain companies and 20 inward delegations from the comfort of your own desk, and will again focus on helping experienced exporters and inspiring new exporters.
We’ve got an exciting speaker line-up from IOCs, NOCs and EPC contractors from high-value export markets across all energy sectors, including Angola, Azerbaijan, Brunei, Canada, Central & Eastern Europe, Cuba, Denmark, India, Indonesia, Kazakhstan, Kuwait, Malaysia, Mozambique, Nigeria, Norway, Oman, Qatar, Senegal & Mauritania, Thailand, UAE, Uzbekistan, Vietnam and Western Australia.
Taking place from 28 September to 1 October, vEEC Week will give attendees the chance to hear about major project updates from key decision makers. In the new world of travel restrictions and difficulties with meeting new people, this event platform is designed to make it easier to meet your next new client, including booking one-to-one meetings with our speakers and arranging immediate meetings with people in an open networking environment.
Q5. Do you see internationalisation differences between traditional oil and gas markets and newer renewable markets?
Out of the major energy projects still going ahead in the current climate right now, interestingly we have found only a 5% overlap in countries between the oil and gas and renewables sectors.
This emphasises the fact that exporters successful with oil and gas may not be able to quickly diversify into renewables and vice versa, purely because of the practical issues of different locations, cultures and additional investments required.
As shown in the EIC Survive and Thrive report, the most popular growth strategy last year was diversification but only 25% of those companies diversified within energy, largely from oil and gas to renewables. Alarmingly, 75% diversified from oil and gas to non-energy markets such as defence, infrastructure and pharmaceuticals, reflecting the increasing uncertainty around oil and gas, the desire by companies to de-risk and the acceptance that there is not enough energy business inside the UK to go around.
Q6. Brexit seems to have gone quiet with all the distractions but is this still a major threat?
The pandemic has certainly taken some of the momentum out of the Brexit process that dominated the news cycle over the last few years. At such a crucial time for UK businesses one fundamental fact remains, businesses and government are not prepared for a no deal outcome, so the EIC urges all involved to not let that happen.
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