Scottish city prepares for when oil runs out

Tue Oct 20, 2009 8:48pm EDT
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By Tom Bergin

ABERDEEN (Reuters) - Offshore supply vessels resembling large, floating flat-backed trucks fill Victoria Dock, unable to find charters in a sign of the downturn in Britain's oil industry.

With UK North Sea oil and gas production 44 percent below its peak, self-styled oil capital of Europe Aberdeen fears the slowdown is not simply cyclical: it is targeting diversification into areas including green energy.

Throughout a hydrocarbon heyday that has run to almost five decades, the city has to some extent been preparing for the end.

The oil industry that at one stage sparked talk of Scotland as "the Kuwait of the West" has already outlived most predictions.

"I'm steering my kids away from anything to do with oil," said John Irvine, a lorry driver who used to work on the rigs. "It's not going to last forever."

BMWs and Mercedes are plentiful in the traffic jams that clog the roads at rush hour and Jaguar, Aston Martin and Porsche sportscars with personalized license plates are evident in the city of around 200,000 inhabitants.

The North Sea industry, with output of 2.5 million barrels of oil equivalent per day currently, pays more to UK government coffers than any other industry, is one of the highest spenders on goods and services and an important employer.

Around 40 percent of Aberdeen area's 10.5 billion pounds economy is reliant on the industry, according to the Aberdeen and Grampian Chamber of Commerce.   Continued...