Aberdeen's pipeline of solutions

If there's one thing sub-sea engineering lacks, it's a sense of aesthetic.

Stuff that's intended to spend its life in the company of halibut tends to be purely functional, lacking any aerodynamic design appeal.

And as one who doesn't do valve design, drilling bits, precision flow monitoring or pigging equipment, lots of the kit on display at the Offshore Europe exhibition in Aberdeen this week leaves me a bit cold.

FMC Technologies is one company's that has tried to help those who don't thrill to engineering design, by devising a 3D film that gives sub-sea engineering an appeal something like Wall-E, the cutesy Disney robot, creating order in an alien environment.

One of those in the know explained to me that all you need to know in a business dominated by rampant initials is that it's all about BWTs and BYTs.

That's to say: Big White Things and Big Yellow Things. That's the range of aesthetic on display.

And as if on cue, the industry was, on Tuesday, proudly showing off a BYT, weighing 40 tonnes, and designed to staunch major spills on the seabed of the UK Continental Shelf.

Eye-popping investments

But the point of the oil and gas industry is not about aesthetic anyway. It's about extracting dirty and dangerous stuff from often risky places, investing eye-popping amounts and often making gob-smacking profits.

We can forget how well Aberdeen "and Shire" do this. Much of the industry is far over the horizon and increasingly it's submerged.

But the Offshore Europe event (1500 exhibitors, 25,000 square metres of exhibition space, and at least 48,000 visitors over three days) is a reminder of what it means to be Europe's energy capital.

Offshore Europe an important showcase for a significant Scottish economic success story.

For those who wonder how Scotland earns a crust in the new global economic order, here's a compelling part of an answer.

Over a barrel

With production peaked 12 years ago and falling faster than neighbouring countries, attention focuses ever more on exporting expertise from these parts, and doing so very successfully.

The biggest markets now include Angola, Nigeria, the US and Norway, which has had added some spectacular new finds in recent months - not least because it's kept drilling more than in the UK.

But there's still life in the UK North Sea yet, as shown by an £700m investment in the Kinnoull Field by BP today.

It's reckoned that, with 40 billion or so barrels extracted so far, there are a further 24 billion to go.

Unpredictable

That last portion is more difficult and expensive to extract, which is why this year's Offshore Europe exhibition is overshadowed by the impact of the £2bn tax raid in George Osborne's Budget.

Making the investment case for the extra kit and platform upgrades required to squeeze the remaining billions of barrels out of sub-sea reservoirs is harder to do when tax is not only high but rising unpredictably, and when there are so many other investment options around the world. As many as 25 marginal fields may be affected by the tax instability.

But even allowing for that, there is still a colossal programme of investment in the pipeline.

Along with the BP announcement - big to most of us, but by no means huge in this industry - the Energy Industries Council on Tuesday released a report into the UK and Norwegian sector, which identified more than £110bn of projects still to come. British waters have168 projects, while Norwegians have 117 Norwegian, but much more of the spend is in the Norwegian sector.

That puts Norway in third place for the value of offshore oil and gas, with the UK in eighth place. Kazakhstan is far in the lead with £80bn, and Russia on £69m.

Golden era

With that in prospect around the world, one industry figure in Aberdeen said this week this is "a golden era for oilfield services".

Colin Welsh of Simmons & Co was reflecting on the price of Brent crude staying above $100 per barrel - defying the volatility across other commodity and financial markets.

That's explained by demand keeping up in emerging economies, and political uncertainty in the Middle East.

But of course, the Aberdonian welcome for oil at $110 a barrel hurts the rest of the economy, in input prices, energy bills and household inflation.

If this really is a golden age, and if Offshore Europe becomes even bigger when it returns to Aberdeen in 2013, here's a plea: not only to use colours other than white and yellow, but to dispense with the word 'solutions' in describing goods and services.

The exhibition is bursting with innovative technology solutions, well logging solutions, mud storage solutions, downhole survey solutions, and, if you look hard enough, some financing solutions.

Even the Met Office has a stand this year. It's offering "weather solutions".