Sir Ian Wood urges investment in Aberdeen Published duration 30 October 2012

media caption One of Scotland's most successful businessmen, Sir Ian Wood, retires with a warning for his native city of Aberdeen

Major investment will be needed in Aberdeen long before North Sea assets become depleted, a leading oil executive has warned.

Sir Ian Wood told BBC Scotland he believed North Sea oil would be in "reasonably strong shape" for the next 20 or 30 years.

But he said the city needed to attract new industries long before then.

Sir Ian was speaking as he prepared to retire as chairman of Aberdeen-based oil services firm Wood Group.

He has been chairman of the company since 1982 and served as its chief executive from 1967 to 2006.

Sir Ian said the oil industry had had a "massive impact" in terms of its contribution to UK industrial activity, producing 41 billion barrels over the years.

But he warned it was necessary to look at the city's post-oil future sooner rather than later.

'Grave danger'

He explained: "My roots in Aberdeen are that my father's father and his father and his father were fishing in Aberdeen, and the last thing I'd like to see is future generations looking back and saying: 'they did very nicely for themselves, thank you very much, but what did they leave for us?'

"That's a grave danger because Aberdeen's got a huge amount of plusses just now: it is a highly enterprising city, cosmopolitan, good quality of life, two super universities.

"But it's got a major Achilles heel - it's dependent largely on one industry, and that's a depleting industry because North Sea oil is a depleting asset.

image caption Sir Ian believes Aberdeen will benefit from North Sea oil for another 20 to 30 years

"Without overdramatising that, I believe we'll have North Sea oil in reasonably strong shape for the next 20 or 30 years - that's a long time.

"But what we mustn't do is wait until 25 years' time when it starts going down and say 'Oh god, what are we going to do now? - we'd better start investing'.

Sir Ian, who pledged £50m of his own money towards Aberdeen's City Gardens Project before it was scrapped by councillors earlier this year, added: "I passionately believe we need to invest in Aberdeen in the next five to 10 to 15 years, to secure the present supply chain with an international base, to establish an eastern hemisphere oil and gas capital in Aberdeen.

"The operators themselves will move on - a long time hence but it will begin to happen. Can we attract some new industries?

"The problem is that not only are we dependent on North Sea oil, we've also got a mindset that we haven't had to compete."

The top oil executive also told the BBC he believed more needed to be done to encourage investment in the North Sea in the next few years to make the most of remaining assets.

'Maximising recovery'

"We've produced 41 billion barrels," he said. "If you look ahead, we could still produce another 25 billion barrels - at $100 a barrel, that's $2,500bn.

"If we don't get it right, we'll produce about half that - we could lose $1,250bn of economic contribution to the UK

"We really have to have the UK government focused on maximising recovery and what's still to come from the North Sea.

"They are beginning to recognise that.

"There's been a step change in the past year or so, asking how we're going to get the industry to invest in the next five to 10 years, because if we don't invest then we will lose the infrastructure."

Sir Ian said he was emotional about retiring from the company after 45 years but added he was a "realist".

"I'm 70 years old, I think it's good to give up when things are going well," he said.