Market & Supply 23
Enhancing collaborative culture within the offshore oil and gas industry is not only key to maximising the potential of its existing world class supply chain but could also unlock future activity in the UK Continental Shelf (UKCS) and be key to delivering a successful Net-Zero future.
Improving commercial models which support cost reduction whilst incentivising the supply chain could re-energise collaboration, according to the findings of the annual Deloitte and OGUK Collaboration Report, published on 28th January.
Deloitte and OGUK’s industry-wide Collaboration Index (CI), which measures the effectiveness of companies as partners in projects, is part of the annual UKCS upstream supply chain collaboration survey. The report showed a slight increase in the collaboration index to 7.1 in 2020 from 7.0 in 2019, highlighting the flexibility and support the supply chain showed during an exceptionally challenging year.
On top of this, collaboration success rates hit a record high in 2020 with more than 50 per cent of survey respondents saying over half of their efforts were successful. In what also marked a first in the survey’s six-year history, the overall proportion of ‘successful’ efforts was higher than ‘unsuccessful’ ones.
However, while COVID-19 saw many businesses work together to address the challenges, respondents said the pandemic and consequent economic downturn also led to disadvantageous commercial behaviours such as cancelled or modified contracts.
OGUK supply chain and operations director, Katy Heidenreich, said:
“OGUK has been encouraging industry to do business in a sustainable way to protect the supply chain. This includes finding innovative ways of working that deliver value for both sides, ensuring that industry has the skills and resources needed when activity rebounds, as well as using the Supply Chain Principles as a mechanism to improve behaviours.
“We redesigned the questions in our 2020 Collaboration survey to understand how well these Principles have been embraced since we launched them.
“Greater collaboration will be a key factor in unlocking future industry developments and to strengthening our basin, our versatility, and our resilience. The ability to work together well across companies, industry and the wider energy sector will be critical to delivering a successful energy transition which supports jobs and the communities we work in. Collaboration needs to be part of our DNA; while it is not a silver bullet, it is good for business.”
OGUK will issue a call to action to promote adherence to its Supply Chain Principles and to communicate the benefits after the survey received a broad mix of views.
Deloitte’s office senior partner (Aberdeen), Graham Hollis, said:
“In what is an extremely challenging environment, the industry must assess new opportunities and challenges as it addresses the year ahead. Organisations need to reimagine their businesses and models and focus on the right set of collaborative behaviours because as the report highlights, working closely with suppliers and customers to support one another will be vital.
“As part of this, Deloitte has produced a Framework for Action which details six building blocks that organisations should consider helping develop and continue building successful collaborative relationships – ones which deliver greater value for both operators and suppliers.”
Deloitte’s Framework for Action supports the OGUK Supply Chain Principles, and both will be key to stimulating collaborative behaviours. OGUK will also be issuing a call to action to promote adherence to its Supply Chain Principles and to communicate the benefits after the survey received a broad mix of views.
With the Supply Chain Principles, energy transition and internal collaboration being new themes explored in this year’s survey, almost two-thirds of operator respondents said they were making some progress to meet their energy transition objectives – in line with the OGUK’s Roadmap 2035: a blueprint for net zero – compared with 49 per cent of suppliers.
While some operators showed best practice in sharing the risks and rewards of working relationships appropriately, there are still opportunities to improve.
OGA’s head of supply, Bill Cattanach, said: “Successful project delivery is more predictable where there is a fair and equitable partnership between operator and supplier.
“There are encouraging signals, as shown in the report, that the industry is leaving old approaches behind and embracing the expertise which exists within the supply chain in a collaborative manner. However, there is still room for improvement, and collaboration should remain a key focus for industry going forward.”
Fuel Oil News would like to thank everyone who nominated a charity in response to our festive email. We are very pleased to announce that we will be donating £100 each to Macmillan, Mind and Midlands Air Ambulance charities.
Fuel supply brand, JET, has today announced that ten new Ascona-owned sites will be joining its growing nationwide network of JET branded dealer sites – a move that further strengthens its relationship with the roadside retailer.
JET currently supplies Ascona Group, one of the fastest growing independent forecourt operators in the UK, at three sites: Fyfield Service Station in Marlborough; Jack Service Station in Stoke-on-Trent and Deepcar Service Station near Sheffield – a relatively new joiner having signed up to the network in November last year (2020).
The ten new sites, mainly located in Bedfordshire, Buckinghamshire and Warwickshire will provide depth and strength in these areas – boosting JET’s total portfolio of UK JET dealer sites to more than 300. And with Ascona sites now numbering 13 and with the potential for further sites in the future, Ascona is fast becoming one of JET’s largest retail customers.
Commenting on the decision to move to JET, Darren Briggs, MD, Ascona Group says: “JET provides an industry-leading fuel supply package and together with their new JET brand image, is recognised in the industry for great value and service. They are the perfect partner for Ascona as we continue to expand our operations in the UK via both organic and acquisitive growth and focus on building best-in-class retail roadside destinations that cater to changing customer needs.”
Working closely with Ascona, the sites will be rebranded and repumped including two KDRB (Knock Down Re-Build).
“We are delighted to welcome these new sites to our JET dealer network and introducing the JET brand to a number of new communities.” Says Oliver Mueller, retail business manager, Phillips 66 Limited “With a reputation driven by good service and good value we are committed to building business relationships with dealers across the UK and are looking forward to helping these new sites flourish over the coming months – further strengthening the JET brand.”
The licensed supply contract with Ascona Group is in place until 2026.
The ten new JET dealer sites are:
The end of 2020 saw the culmination of a 3-year development program by Sampi in collaboration with Alpeco Ltd. As a result, Alpeco has announced their brand new TEX FLOW computer which has attained full UK approval and has been successfully undergoing trials with Nolan Oils on its new COBO tanker since September 2020.
Claire Bishop
World Fuel Services has announced that Claire Bishop has been promoted to the role of Vice President, UK Land. Claire started in her new role on January 1st, and takes over from Bob Taylor, who will be retiring in May. As vice president, Claire will oversee all aspects of World Fuel’s UK Land business, comprising Watson Fuels, fuel cards, lubricants, boiler servicing and wholesale fuel activities.
Since joining World Fuel Services in 2016, Claire has worked as senior finance director for UK Land as well as serving as an executive member of the UK Land board. She has played a key role in leading and developing the UK Land business through a period of significant change, which has seen business transform its leadership team, established specialist sales and operational divisions, and invest in new technology, depot infrastructure and advanced vehicles. Before joining World Fuel, Claire held a variety of finance director positions, for companies across the technology and manufacturing sectors.
“I am thrilled to have this opportunity,” comments Claire. “I’m proud to be picking up the mantle from Bob, and to be getting the chance to build on the fantastic work he has done over the past three years. I’m also pleased to work for a company that promotes from within, and one that is focused on supporting diversity and inclusivity. I look forward to continuing to work alongside our great team in the coming months and years ahead.”
Paul Vian, senior vice president, EMEA for World Fuel Services, spoke of his excitement for the future of the business under Claire’s direction. He said:
“Alongside Bob and his leadership team, Claire has played an integral role in developing our systems and processes, and investment in our talent, which has provided the solid foundations upon which we have been able to successfully develop and grow. Our company commitment to succession planning and talent development has made the decision to promote Claire to Vice President, UK Land a rather natural process.”
Paul continues:
“As I wish Bob all the very best of happiness as he completes his journey on a very successful and illustrious career, I also wish Claire all the very best of success as she embarks upon her new journey within World Fuel Services.”
The Tank Storage Association (TSA) has formally launched a new Environmental, Social, and Governance (ESG) Charter affirming the sector’s shared commitment to environmental, social and governance principles.
The ESG Charter has been developed in conjunction with member organisations and is accompanied by a framework to assist TSA members in developing clear and common policies. The commitment builds on TSA’s recently launched Safety Leadership Charter and Significant Indicators programme, demonstrating the sector’s dedication to continuous improvement.
Peter Davidson, executive director of the TSA, said:
“TSA’s members play a vital role in the UK’s economy by providing the critical infrastructure necessary for the transportation of bulk liquids, creating jobs and fostering innovation. Through adherence to the Charter, our members affirm their shared commitment to environmental, social and governance principles. Our association continues leading from the front and this, together with our Safety Leadership Charter and Significant Indicators programme, demonstrates our commitment to strive for continuous improvement.”
For an electronic copy of TSA’s Environmental, Social, and Governance Charter, click here.
Motor Fuel Group (MFG) announces that it has signed an agreement to purchase seven operational stations and nine new to industry (NTI) sites from BP. This is part of a wider agreement including fuel supply for 100 sites.
Fuel retailer Usman Patel recently celebrated 40 years of selling Texaco branded fuel at his three service stations in Greater Manchester. Usman owns the Mabco Group sites: Caroline Service Station, Lancashire Hill Service Station and Reddish Service Station. All the sites are located within 10 miles of each other in Stockport and have supplied fuel under the Texaco brand since Usman first became a tenant in 1980.
North West and Yorkshire based fuel supplier Craggs Energy has recently expanded its group of companies with the acquisition of Devon based fuel distributor Moorland Fuels.
OGUK announces that its Diversity & Inclusion Task Group will deliver a free online event exploring how the industry supports the mental health of its colleagues, on Monday 18 January.
The hour-long session will include insight from leading voices on the topic from within the oil and gas industry and beyond, including Harry Bos (UK manager flight operations, CHC), Steve Beedie (mental wellness influencer and speaker), Paul Craig (safety manager, North Star Shipping), Dr. Ada Ifezulike (family physician/GP and lifestyle medicine physician).
The D&I Task Group was set up by OGUK in 2019 to bring together industry and drive action on diversity and inclusion. The Task Group includes representatives from OGUK member organisations and is supported by OGUK, the Oil & Gas Technology Centre (OGTC), Axis Network, and the Scottish arm of AFBE-UK.
Craig Shanaghey, Wood’s President of operations across Europe, Middle East & Africa, and D&I Task Group chair, said:
“It is well reported that the COVID-19 pandemic presents a significant mental health challenge – it is sobering to know that not many will have been able to avoid some degree of mental health struggle over the past year.
“As a task force we have an opportunity to dial up the dialogue on the mental health challenges faced by those working in our industry, recognising that each individual, and their personal attributes and circumstances, needs different focus and support.
“We’re delighted to be joined by a panel of expert speakers from a variety of backgrounds to discuss the topic. Their insight will be key as we explore the effects of the pandemic on the mental health of the diverse people working in the UK energy industry, and how we can learn to do better as we navigate towards a post-pandemic world.”
The session will be chaired by Mavis Anagboso, OGUK Diversity & Inclusion Task Group member and managing director, TOJU Consulting.
To register, please visit: https://bit.ly/3ol9Igu.
Centre Tank Services Ltd have added a new distributorship under their belt with the Aquafighter range of fuel tank water absorbers. The increasing bio content in today’s diesel means that the issue of water in fuel is not going away, and as the percentage of bio increases, it is an issue that is becoming even more prevalent.
INEOS has completed the purchase of the global Aromatics and Acetyls businesses from BP for a consideration of $5 billion.
Already one of the world’s leading petrochemical companies this acquisition will extend both the portfolio and the geographic reach of INEOS. The businesses will be known as INEOS Acetyls and INEOS Aromatics.
INEOS Aromatics is a global leader in PTA (Purified Terephthalic Acid) and PX (Paraxylene) technology with 6 sites and supplies the global polyester business which includes polyester fibre, film and PET packaging.
INEOS Acetyls produces acetic acid and a range of derivatives from its 9 sites, supplying a wide range of downstream industries such as food, pharmaceuticals, paints, adhesives and packaging.
Sir Jim Ratcliffe, founder and chairman of INEOS adds:
“I am very pleased that we have been able to complete the acquisition, which is a logical development of our existing petrochemicals business extending our interest in acetyls and adding a world leading aromatics business supporting the global polyester industry.“
As UKIFDA launches its new future vision for clean growth and decarbonisation Guy Pulham, chief executive comments:
“We’ve always supported the principle of decarbonisation, clean growth and clear air and now with the first trials of liquid biofuels taking place in off grid homes across the UK and Ireland we felt it apt that our new Future Vision – a strategy to transition liquid biofuel distribution should be published.
“In 2019, a study by consultants In Perpetuum (commissioned by fellow trade association OFTEC) clearly showed that the most cost-effective solution for reducing carbon emissions in off-grid homes was liquid biofuel. A B100 fuel (containing zero fossil fuel) would result in a cost of £122 per tonne of carbon saved which compared very favourably with other possible solutions including those seemingly favoured by the government and that cost will be borne by the homeowner.”
UKIFDA’s strategy and vision for a liquid fuel future highlights the key role liquid biofuels can and should play in heating 1.5m homes across the UK and 686,000 in the Republic of Ireland together with industry including farming, transport, construction and marine and sets five key challenges to government to:
Essar Oil (UK) Limited, which owns and operates the Stanlow Manufacturing Complex, announces the further strengthening of its executive leadership team with the appointment of Stephen McCaffrey as chief financial officer.
Stephen is highly experienced in the Oil and Gas, Renewables and Infrastructure sectors and has specialist expertise in financial control, business development, strategic planning and working capital and project finance management and implementation. Having spent 13 years at Greenergy, the last four as chief financial officer, he has a detailed understanding of the UK downstream industry.
Most recently CFO at Avenir LNG Limited, he has also previously held roles with the BOC Group, Merrill Lynch and PWC. He holds a degree in business (accounting and finance) and is a fellow of the Institute of Chartered Accountants of Australia.
Essar chief executive officer, Stein Bye, said: “This is an important and strategic appointment for the company, with Stephen bringing with him a wealth of experience at the very highest level. The year ahead will be key to our long term sustainability as we look to recover from the effects of Covid-19 and transform our business to meet the demands of a low carbon economy and deliver the energy solutions of the future for the UK.”
The Hoyer Group has adopted a new organisational structure to equip itself for the energy transition. As of 1 January 2021, the logistics company combined its Petrolog and Gaslog business units under one roof. Known as the ‘Contract Division’, it unifies contract logistics for gas and mineral oil supplies. Combining the highly specialised areas will develop synergies, especially at the organisational structural level. The newly-established business unit has about 1,500 special trucks and the expertise of around 3,500 employees at its disposal.
The strategic decision to organisationally combine the former Petrolog and Gaslog business units positions the Hoyer Group favourably in the market. As well as bitumen logistics and aircraft refuelling, the mineral oil business focuses particularly on supplying service stations, airports and commercial customers. In this business area, Hoyer sees a growing future demand in the supply of gases such as liquified natural gas (LNG), compressed natural gas (CNG) and hydrogen as alternative fuels. The combined strengths of the two business areas will be fully brought to bear in the newly-created Contract Division.
Developed in partnership with port operator Associated British Ports (ABP), the new refuelling bunker site is the first of its kind to be opened inside the port. It features an offset tank layout with a combined capacity of 250,000 litres and eight high-speed refuelling pumps, which dispense fuel at speeds up to 120 litres per minute.
Any consultation arising from the Government’s long anticipated Heat in Buildings strategy must allow a genuine discussion on all the options to decarbonise rural homes, otherwise thousands of households could suffer severe financial consequences, warns OFTEC.
Up until now, government has given out mixed messages on its approach to cutting emissions from off grid heat, using the term ‘technology neutral’ whilst only supporting a narrow choice of technology options, primarily heat pumps and biomass boilers.
These solutions work well in some settings and heat pumps, in particular, will play an important role in the UK’s transition to net zero. But they are expensive to install and not the right option for all properties, including many energy inefficient off-grid homes without very costly and disruptive insulation improvements.
OFTEC says it’s crucial government recognises the unique challenge decarbonising rural homes presents and that any future consultation fully explores the best ways to achieve this.
Head of public affairs at OFTEC, Malcolm Farrow, comments:
“What we don’t want to see – and what rural consumers can’t afford to happen – is that the Buildings and Heat consultation, through its line of questioning, makes it impossible to bring the full range of low carbon heating options into the discussion.
“If the Government is serious about making rapid – and socially fair – progress, it must widen its perspective and adopt a truly technology neutral approach. This is the only way to encourage competition, improve consumer choice and ensure practical options are available for all housing types and incomes.
“Failing to achieve this could be disastrous for rural households as many will face a completely unaffordable financial burden. As well as causing great social harm, it could also rapidly erode support for decarbonisation and will further delay progress.”
Over 45 key players in the off-grid heating industry have already written to the Minister of State for Business, Energy and Industrial Strategy (BEIS) underlining their readiness to deliver a renewable liquid fuel alternative to kerosene which offers a cheaper, more practical solution for oil heated homes than the current options supported. Yet so far, government has shown little interest in this solution.
Malcolm Farrow continues:
“Renewable liquid fuels must be given a fair hearing in any consultation. If government continues to ignore the potential of this solution, it is turning its back on the opportunity to save rural households and the Treasury, millions of pounds. This makes no sense.
“Government needs to learn from the experience of the last six years which has shown that even with considerable incentivisation through the domestic Renewable Heat Incentive, the take up of heat pumps by rural households has remained disappointingly low.
“Now is the time to set aside any preconceived ideas around the ‘best’ solutions for off-grid households, genuinely listen to all the options on the table and trust industry to deliver.”
The Sixth Carbon Budget published from the Committee on Climate Change (CCC) outlines the requirement for a 78% reduction in UK territorial emissions between 1990 and 2035. Despite bringing forward the UK’s previous 80% reduction target by nearly 15 years, the industry is seeing this challenge as a positive step towards a net-zero future.
In response to the recommendations, the UK downstream oil sector reiterates that it wants to work closely with UK governments to deliver the most effective policy and economic frameworks needed to reach net-zero.
Downstream oil is already playing a significant role in meeting societal targets for decarbonisation, and UKPIA launched its report – “Transition, Transformation, and Innovation: Our role in the Net-Zero Challenge” in October, which sets out an illustrative pathway for the sector in the energy transition.
Sir Ian Wood, Sir Ian Wood KT GBE chair of Opportunity North East, (ONE) commented:
“The publication of the UK Committee on Climate Change’s Sixth Carbon Budget is a very positive step on our journey to a net-zero future. A fundamental shift in how we produce and use energy is essential to deliver this plan and the North East of Scotland, with its incredible natural resources and world-class energy supply chain, is uniquely placed to accelerate the transition.
“After half a century of oil and gas production, with more to come produced with ever decreasing emissions and a rapidly growing renewables sector, this region is already recognised globally for its energy expertise. We must now build on this strong position to become a global leader in energy transition.
“Aberdeen’s proposed Energy Transition Zone will provide the critical infrastructure needed for this low carbon activity and has received strong interest from international companies, industry and government. It will be home to leading-edge innovation and manufacturing for offshore wind, hydrogen and carbon capture and storage activities, creating the environment for the energy supply chain to diversify into new markets at home and abroad.”
UKIFDA, having lobbied for targets and timelines, also welcomes the Sixth Carbon Budget and is pleased that the CCC agrees. However, liquid biofuels are still not included in the list of possible decarbonisation solutions thereby potentially limiting options and increasing costs for 1.5m households in the UK.
Many of the CCC recommendations and timelines would allow UKIFDA members to play a part in achieving the net-zero aims but the association stands by the importance of government recognising the role liquid biofuels can play in decarbonising both heat and transport. Whilst UKIFDA was pleased to see that bio-kerosene were mentioned by the CCC, it also wanted to see that talked more about in the wider sense of being an option for heat policy as well as transport.
UKIFDA went on to say:
“We absolutely agree that government support on energy efficiency measures is required – both on and off-gas grid – that encourage consumers to upgrade existing equipment, improve insulation and install smart controls to better monitor energy usage. We believe that these measures are vital in moving homes upwards through the EPC ratings and thereby reducing emissions although care needs to be taken that the disadvantaged, such as the fuel poor, are not excluded.
“It is important that consumers have choice and we again urge the government to include liquid biofuels in policy for off the gas grid homes. Hydrogen is an option as an alternative to gas heating as well as heat pumps and rural consumers should be given choice over the solutions, they use to decarbonise their home heating otherwise they will unfairly face enormous expense.
“65% of oil heated properties (765,000 homes) are in EPC Bands E-G and among the least energy efficient homes in the UK and will take more than the proposed £10,000 per property average upgrade cost to bring a property up to EPC C. At a time when COVID-19 is having devasting effects on people’s jobs and finances we should, as a country, be looking to ensure we don’t place additional financial burdens on households and government must focus on putting in place a policy framework that will create a competitive market and drive down prices, enabling consumers to select low carbon products that best suit their needs and budgets.
“The CCC suggest hybrid heating systems as an appropriate solution for off-grid properties. We believe this is important consideration for some homes and are pleased to see this included as using a hybrid unit combines the higher flow temperatures produced by a boiler, with the operation of a heat pump, to meet the buildings heat demand throughout the year. But why replace boiler equipment when a drop in, liquid biofuel will be available that has a lifecycle carbon emission factor as good as biomass (the government’s preferred non electric solution).
“Our industry is undertaking trials of liquid biofuels across the UK (similar to the gas industry undertaking hydrogen trials) and we believe that liquid biofuels can and should play a part in the Committee’s list of core solutions for buildings as well as transport.
“What we need now is a supportive and timely response from the UK Government to these proposed timelines from the CCC, so businesses and the public can get on with reaching it. Government should set the right legal and policy framework to enable industry to invest and innovate and say that liquid biofuels will form part of the policy solutions. Once they do that, then industry will respond to the supply challenge and consumers will have choices in beginning their personal decarbonisation transition and this is the point we strongly want to make to you and government. To succeed, government policy must encourage innovation and investment and our industry is waiting to start meeting the needs of the UK’s Net Zero challenge – so why delay us further?
“We remain committed to the ambitions of the CCC and would welcome direct conversation with the Committee on some of the points raised and to discuss how we, and our members, can support the energy transition.”
OFTEC’s response to the report was also positive and, similarly to UKIFDA, suggests how liquid fuels could play a big role, if the CCC’s ambition is backed by the right policy support as Malcolm Farrow, head of public affairs, explained:
“OFTEC welcomes the Sixth Carbon Budget report which clearly sets out the scale of the UK’s challenge to reach net zero, particularly in heating. We also welcome the inclusion of biokerosene within the range of low carbon heating options endorsed for off-gas grid homes in the road map.
“OFTEC believes that, if backed by the right policy support, the use of renewable liquid fuels could enable the CCC’s ambition to end the installation of new fossil fuel oil boilers in rural homes by 2028 to be achieved even sooner.
“The rapid deployment of a renewable liquid fuel, namely HVO, would meet the CCC’s requirements to quickly gain ground on emissions cutting. This near drop-in replacement for heating oil offers a carbon reduction of approximately 91% which is significantly greater than heat pumps can achieve until the electricity grid is more fully decarbonised later in the 2030s. Existing oil heated households could switch to an HVO solution at a fraction of the cost of installing other low carbon technologies. Household disruption is also minimal, making this a ‘frictionless’ option that overcomes two of the main barriers to heat decarbonisation that currently exist. An HVO solution also allows more resource to be channelled into the energy efficiency improvements the CCC has identified as a priority.
“The overriding challenge for government now is to develop policies that are fair, affordable and effective – a point emphasised by the CCC. For off-gas grid homes this is a critical requirement and HVO must be included among the technologies supported to achieve this transition. OFTEC remains committed to supporting this option and industry is now just waiting for the signal from government to start delivering an HVO solution.”
The downstream sector has always risen to challenges and will continue to do so to reach the net-zero goals as UKPIA’s director general, Stephen Marcos Jones concludes:
“This is an exciting yet challenging period of evolution for the downstream oil sector – we are committed to action on climate change and with the right policy framework, this sector will do its part to deliver Net-Zero.
“It is only through industry and government working closely together that the task of Net-Zero will be achieved in the UK.”
Top 50 Indies forecourt operator, Motor Fuel Group (MFG) has acquired six forecourts in the Lake District from AUK Investments Limited.
Energy industry professional Ken Cronin is to become the new chief executive of UKIFDA replacing current CEO Guy Pulham who leaves on February 4th 2021.