The effect of the North Sea Oil on Scottish economy

The North Sea Oil has exerted a considerable influence on Scottish economy in recent decades. Especially Aberdeen is famous for being the “capital” of North Sea Oil industry and most Scottish oil and gas companies have their headquarters there. There are only a few in Edinburgh. However, luckily, our Edinburgh city tour guide Gavin Hunter worked on an oil rig before, so while he was having lunch with us, he could tell us how an oil rig is built, how to drill for oil and how the oil is transported to the coast then.

 

North Sea Oil - Drilling For Oil

This is how Gavin Hunter explained how to drill for oil:

“In some ways, drilling for oil is like digging a hole in the sand at the beach. At first it is easy, but when the hole gets deeper the sides might be filled with water. If you drill deeper it becomes more and more difficult to lift the sand. And if you hit gravel or stones it is hard to continue digging.

The North Sea can be quite deep at some places. Especially near Scotland, along the British coast. So it might happen that you cannot even see the top of the hole from the surface of the water. And you cannot be sure that you drill in the right direction.

It is very important to end up in the right place, so we are lucky that nowadays we can use special computers and equipment to tell us how deep to drill and in what direction. And in the last few years we have learned how to change direction while we are drilling. That is a great progress! We can drill downwards for example and then turn the direction of the hole so that it ends up being horizontal. This can be very useful for reaching new areas which are far away from where the top of the hole is.

Of course you have to build a drilling rig first to put your people and equipment on. Let me explain it to you how this is done. Building it is not very spectacular, they just do it in the mainland – but transporting it to the place where to drill for oil is something very demanding. Luckily, experts have found a way to do it with only little risk. They transport it horizontally!

The rig module is transported horizontally, because it is so high. Imagine a module like that being placed on a transporting ship. Unfixed, it could easily fall into the water.

As soon as you have reached the place where you want to drill, you have to turn it around 90 degrees and then fix it firmly to the bottom of the sea. In the North Sea it is not too difficult to do that, but in seas which are deeper, this is hardly possible.

You say, that you have travelled here by ship from Amsterdam. So you must have seen some oil rigs near the British coast! Especially when the weather is good, you can see them from the ships.”

Gavin smiled when he said:
“Isn’t it romantic to be on a
ship at night and see oil rigs
on the horizon?”

 

So we thanked Gavin very much for giving us so much information about the building and transporting of oil rigs
and the work on it.

He was sorry not to be able to tell us more about the economic aspects of oil, but it was possible to gain information about the effect of the North Sea Oil on Scottish economy from websites of Scottish oil companies.

The oil industry is very modern. 1969 was the year when people started drilling for oil in the North Sea. Since then, the oil industry has gained more and more importance for countries adjacent to the North Sea. Of course the oil industry did not grow constantly, there have also been periods of recession – as for example in the early 80s.

In recent years, a new trade element has appeared. Not only oil itself is traded, but also expertise. If you have a new idea how to drill and especially where to drill for oil, you can “sell” your idea. This is a modern method in the oil industry.

The North Sea Oil is certainly not infinite. It becomes more and more important to know places where to find oil in a quantity that makes the companies profit when they drill there.  The costs for drilling are high, so before you start, you must be sure that the oil you are going to get will at least cover the costs.

Places with a large amount of oil have become rare and the North Sea Oil industry has started to decline a little bit. Still, 270,000 workers are employed in the North Sea Oil industry and in Scotland there are 20,000 people working in oil & gas extraction and related activities.

It was really difficult to get an interview from a representative of an oil company in Edinburgh. – There are only a few. However, we were lucky again: On our project day, there was an opportunity to talk to Mrs Mills, an executive of Cairn Energy, an oil company, which has its headquarter in Edinburgh, but Cairn Energy is predominantly interested in the oil of the Indian Ocean.

Mrs Mills pointed out:

“Do you know something about the differences between drilling for oil in the North Sea and drilling for oil in the Indian Ocean? Let me explain it to you: It is a question of danger! The North Sea is better shielded by land than the Indian Ocean.  For oil rigs and the workers on them, strong waves can be dangerous. That is why it is so important to build resistant oil rigs. If they are not, they might break and the consequences would be really serious!

So the North Sea is a rather safe place to drill for oil in comparison to the Indian Ocean. If you drill in the ocean the oil rigs are not protected at all. It is just the open sea!

The strength of water should not be underestimated!

Here you can see the North Sea! There is land on nearly each side. Great Britain, the Netherlands Germany, Denmark and Norway are relatively close. So if you drill for example near the east cost of the United Kingdom as Scottish companies mostly do, the risks are low that the waves are strong enough to be able to damage the oil rigs.

But there are new projects about drilling for oil also in the west of Scotland and this would be very dangerous because that is the Atlantic Ocean and it is well-known that the ocean can release great power.”