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					                                  Cogent Market Assessment




      MARKET ASSESSMENT
                 Final Version

           For submission to SSDA
                as part of the
            Business Proposition




                   Building the
 Sector Skills Council for Oil and Gas Extraction,
Nuclear and Radiological Technology, Chemicals
Manufacturing, Petroleum and Polymer Industries
                                            Cogent Market Assessment



                          Contents

                                                          Page
Introduction                                              3

Executive summary                                         4

Section 1: Market pressures and performance

1.1   The sector                                          5
1.2   Drivers of sectoral change                          8
1.3   The current state of play                           20

Section 2: Changing skills needs

2.1   Employment patterns                                 23
2.2   Skills supply and employer training                 30

Section 3: The proposition

3.1   A vision for the sector                             34
3.2   Employer engagement                                 38
3.3   Engaging partners                                   38

Appendices

1     SIC Codes                                           40
2     National Occupational Standards                     46
3     Sectoral engagement with skills agenda              47
4     Evolvonline™                                        50
5     Partnerships and Interactions                       51
6     Sources                                             65




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                                                              Cogent Market Assessment




Introduction

The expression of interest from “Cogent Plus”, representing Oil and Gas Extraction, Nuclear
and Radiological Technology, Chemicals Manufacturing, Petroleum and Polymer Industries,
was accepted by the SSDA board in May 2003, leading to the development phase of the new
Sector Skills Council.

In the months since May, Cogent has developed a Market Assessment, a five year strategic
plan, and an 18 month business plan. This document, the Market Assessment, was used in
the formulation of both the business plan and the strategic plan.

Compiled in line with “Market Assessments – A Guide” (SSDA 2003), the Market Assessment
builds on the detail of the expression of interest, showing the footprint and employment base
of the sector, and the strategic aims of the Sector Skills Council.



Summary of Sources

The information sources used in the generation of the Market Assessment included official
Government databases and websites, such as National Statistics, NOMIS, ABI, DTI, DfES,
DoT, and industry specific reports generated by the National Training Organisations
previously responsible for the sector (OPITO for upstream oil and gas extraction, PINTO for
downstream petroleum, CMPNTO for chemicals manufacture, PAINTO for polymers and sign
making). For nuclear and radiological technology (not previously covered by an NTO) the
primary source of information was a report commissioned by the DTI.

A full listing of the sources can be found at Appendix 6.




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                                                                 Cogent Market Assessment




Executive Summary

The Market Assessment confirms the facts relating to strategic and economic significance of
the sector. It also shows a current snapshot of the sector – age and gender profiles,
geographical areas of activity, financial and environmental pressures, and existing skills
issues.

It also shows the drivers of change in the sector, such as the planned introduction of new
legislation, consumer attitudes to the industries within the sector and their products, and any
other trends in requirements and demand (for example, skills “hotspots”).

The main purpose of the Market Assessment is to inform the future strategy for the sector,
and for its industries. The direction dictated is that

       Extensive work is required to improve the image of the sector as a whole, and of the
        industries within the sector, to ensure that future recruitment needs are addressed.
        These needs will arise through a combination of factors, including the continuing
        introduction of new technology, and the age profile of sector employees (replacement
        demand). The sector must also be seen as attractive to a widely diverse audience.

       “Cogent Plus” must have influence on the training and education system, both
        academic and vocational, to ensure that occupational standards keep pace with
        technology shifts, and that skills and knowledge of new and current employees reflect
        business need.

       Continued expansion of engagement with employers and other stakeholders at a
        strategic level is required, in order to ensure that skills have equal weighting to other
        aspects of business planning, and that there is recognition of the need to invest in
        skills.

       “Cogent Plus” must deliver solutions to employers at local, regional and national level,
        such as access to learning programmes, development (in partnerships with others) of
        new learning programmes, occupational standards and qualifications.

These finding were then used in the development of the Strategic Plan and subsequently the
Business Plan.




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                                                                Cogent Market Assessment




            SECTION 1: MARKET PRESSURES AND PERFORMANCE



1.1     THE SECTOR

        The Cogent sector extends over five industry groupings, included within the SIC
        Codes as shown in Appendix 1.

            Oil and Gas Extraction
            Nuclear and Radiological Technology
            Chemicals Manufacturing
            Petroleum Industry
            Polymer Industry

        All five industries share a common foundation – engineering, science and technology.
        In order to give a consolidated definition of the sector, information has been drawn
        from several sources.

1.1.1   The main areas of activity in the sector

            Exploration for and extraction of oil and gas from the UK continental shelf (SIC11)
            Refining of crude oil (SIC23.20)
            Storage, blending and distribution of petroleum-based fuels
            Lubricants and bitumen manufacture (SIC23.20)
            Retail sale of fuel on forecourts (SIC50.50)
            Manufacture of chemicals (SIC 24.1, 24.2)
            Manufacturing of consumer products, such as cosmetics and detergents
                  (SIC24.5)
            Manufacture of active ingredients for the pharmaceutical industry (SIC24.4)
            Nuclear propulsion
            Defence – nuclear deterrent
            Decommissioning and clean-up of nuclear legacy
            The nuclear fuel cycle
            Nuclear heat (fission based power generation and fusion research)
            Conversion of raw polymer into products and components (SIC25)
            Manufacturing and designing machinery and equipment for polymer processing,
             including moulds, tools and dies
            Manufacturing and installation of signs
            Design, innovation and research and development linked to new materials and
             their applications

        A significant number of employees within the sector fall into occupations not covered
        by SIC Codes, or cannot legitimately assume to be a significant part of the functional
        description.

1.1.2   Profile of sector employees

        In common with many other sectors, the age profile of the Cogent sector, as a whole,
        shows an ageing workforce, with relatively few employees under the age of 25. There
        are some industry specific differences, including where age profiles are skewed due
        to the requirements of the job role.

        Diversity within the sector, in both gender and ethnicity, does not reflect the expected
        inclusion profiles, with all five of the industries over-represented by white males,
        especially within process level occupations.




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                                                            Cogent Market Assessment


Age Profiles

Within the nuclear industry, there does not appear to be an age problem at the
moment. However, a number of key „hot spots‟ do exist – for example, NII Inspectors
tend to be concentrated in the higher age bands. However, industry experience is
needed for this position, which would explain this pattern. In addition, MoD personnel
tend to be encompassed within the higher age bands. The next 15 years will see a
large number of retirements from the industry, leading to a high level of replacement
demand. (Ref 1)

Within the chemicals industry, existing skills issues may be made worse by
demographic factors. Currently, there is an aging population, with fewer young people
opting for a career pathway in scientific disciplines – the industry is seen as
unattractive. Thus, the workforce is retiring at a faster rate than those entering the
industry. Demographic trends indicate that there is a decreasing amount of available
talent entering the industry. Fewer than 4% of process operators are under 25, while
23% are over 50. The demographic issue is also more distinct in certain UK regions.
(Ref 2)

The oil and gas industry also has an aging workforce. The 2000 Foresight report
highlights this problem, stating that less than 6% of the workforce is under 25 (31%
are 36-45, 29% are 46 -55). However, recent initiatives have already had an impact
on this profile, with the introduction of a number of Modern Apprentices. (Ref 3 & 4)

In the petroleum industry, Field Operators constitute the largest group of employees
in the Stabilising Refining and Manufacturing category of the downstream industry.
Control Room Operators and Field Operators are, in terms of skills issues, key to the
focus of future SSC activity for the petroleum (downstream) industry as detailed in
sections 2.1.2 and 2.2. The age profiles vary for each job category within the industry,
but, with the exception of forecourts, the trend is similar to the rest of the sector. (Ref 5)

4% of employees in the sign making sector, which has a high proportion of SMEs and
micro businesses, are aged 16-19. (Ref 6) For the rubber industry, this falls to 1%. The
workforce development plan suggests a number of reasons for this. Firstly, it may be
due to health and safety concerns regarding the employment of young people in a
manufacturing environment. Secondly, it may be due to an unwillingness to recruit
young people into a position whereby shift work is essential. Thus, the above,
compounded by the fact that there are a large number of 55+ (12%) means that there
is an urgent need for new, younger recruits into the industry. (Ref 7)

In plastics manufacturing, there is once again a small proportion of employees aged
below 20 (5%). Furthermore, there are a large number of over 55s (11%). This leads
to the same conclusions as stated above for the rubber industry. (Ref 8)

Gender and Ethnicity

When compared to the UK as a whole, there is under representation by women in
most areas. For example, less than one in ten women‟s jobs is in the manufacturing
sector (Ref 28). Representation from minor ethnic groups differs greatly depending on
the area of employment within the industry as well as geographical location. In order
to address some of the imbalances, work has been carried out by the predecessor
organisations, and future work will be undertaken by Cogent.




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                                                           Cogent Market Assessment



 AREA                                  MALE           FEMALE       WHITE           OTHER
 CHEMICALS
 All Areas                             80             20           98              2
 Process Operations                    97.7           2.3
 Professional roles                    80             20
 OIL & GAS
 All companies                         82             18           Not currently available
 UKOOA Members                         67             33
 PETROLEUM
 Forecourts: cashiers/managers         50             50           83.6            16.4
 Forecourts: Maintenance               93             7
 Store/Blend/Distribute                Not currently available     98.8            1.2
 Stabilise/Refine/Manufacture                                      98.2            1.8
 POLYMERS
 Sign Making                           93.1           6.9          99.6           0.4
 Rubber and Plastics                   78.8           21.2         Not currently available
                                                                           (Ref 3, 5, 7, 8, 9)
Examples of contributions to equal opportunities include:

Broad Level Research Report on the Gender Imbalance in the Oil and Gas
Industry in Scotland

This report was compiled by NTP Meridian (Scotland) and centres on gender
imbalance within the Oil and Gas industry in Scotland. The primary aim of the project
was to increase both employer and employee awareness of equal opportunities, and
it was designed to encourage employers to consider any gender imbalances within
the sector.

The research formulated by the report has demonstrated the various cultural attitudes
both within and about the industry. The primary beneficiaries of the report will be
women, who are under-represented in the industry, and employers who could
potentially utilise this underdeveloped resource. (Ref 14)

As a result of the research programme outlined above, a workbook “Understanding
Equality and Diversity within the Oil and Gas Industry” was produced that encourage
the awareness of equal opportunities within the sectors investigated. The information
formulated in the report will aid in the production of training materials to help increase
awareness of equal opportunities in the industry. Employers will be able to access
newly developed learning materials via the Cogent e-learning portal. (Ref 3)

Assess and Promote Career Opportunities for Women in the Polymer Industry
Linked to Campaign 2000

This report was compiled by Polymer NTO in May 1998 and aimed to identify the
reasons underpinning the lack of women in the polymer industry. It suggested how
the NTO and others could try to encourage more women into the industry in the
future.

The findings highlighted the extent to which women are discriminated against; their
under representation in employment in the industry and in higher skilled occupations;
the social problems faced by female full-time workers; the lack of opportunities they
face regarding training/promotion/flexible working.

English for Speakers of Other Languages (ESOL) Initiative for the Downstream
Sector: The issue of English fluency among workers in the downstream sector
(specifically forecourt retailing) was signposted by Cogent (PINTO. A focus paper was
published highlighting the difficulties faced by a large percentage of the workforce.
An initiative to develop a national programme for those employed in the downstream



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                                                                    Cogent Market Assessment


        petroleum sector (specifically forecourt retailing), who speak English as a second
        language was recently launched by Cogent.

1.1.3   Size and Structure of the Sector

        The total number of employees within the sector is estimated as 805,700:

         Nuclear & Radiological Technology: defence                             7,000
         Nuclear & Radiological Technology: power generation                    8,000
         Nuclear & Radiological Technology: fuel cycle                         20,000
         Nuclear & Radiological Technology: source manufacture                  3,000
         Nuclear & Radiological Technology: nuclear clean up                    8,000
         Nuclear & Radiological Technology: contractors                         8,000
         Nuclear & Radiological Technology: education & research                1,000
         Nuclear & Radiological Technology: regulators                          1,000             56,000
         Chemicals Manufacturing                                              170,000            170,000
         Oil & Gas Extraction: direct employees                               104,200
         Oil & Gas Extraction: supply chain employees                          66,500            170,700
         Petroleum                                                            123,000            123,000
         Polymers Processing                                                  233,000
         Polymers Others                                                       28,000
         Polymers Sign Making                                                  25,000            286,000
                                                                              TOTAL              805,700
                                                                      (Ref 1, 16, 17, + National Statistics)

        Employees within the sector can be further       categorised by job roles, the main roles
        being
           Senior Officials                              Skilled Trades
           Professional Occupations                      Process Plant & Machinery Operators
           Elementary Occupations                        Administration & Secretariat
           Associate Professional & Technologist

        For Nuclear and Radiological Technology, the highest concentration of employees is
        in the Professional category, at 36% (20,160), with 25% (14,000) in Skilled Trades. In
        the Chemicals industry, 24% (40,800) are employed as Skilled Trades, with 26%
        (44,200) employed as Process Plant and Machine Operators. For Polymers, 44% are
        employed as operators, with 14% in skilled trades (craft and related) and 14%
        professional and technical. (Ref 1, 9, 15)

1.2     DRIVERS OF SECTORAL CHANGE

1.2.1   Economic conditions

        In March 2003, HM Treasury reported that the UK trade deficit in goods and services
        was £2.3 billion. Non EU goods deficit was £2.7 billion in March, an increase from
        £2.4 billion in February. EU goods trade deficit in March was 0.9 billion (1.1 billion in
        February). In March 2003, goods export volumes fell by 1.1% - Imports by 1.2%. In
        the 12 months to April, materials and fuel prices increased by 0.1%. The EU is the
        major market for the Cogent Plus industries, therefore variations in economic
        conditions in the rest of Europe can affect production planning and materials costs.

        March 2003 saw fairly strong output producer price inflation; however it decreased
        slightly in the following month. This was primarily the effect of a fall in the inflation rate
        of petroleum products. In addition, input prices in April were affected by an 18% per
        cent fall in crude oil prices.




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                                                                Cogent Market Assessment


1.2.2   Patterns of competition

        In the nuclear sector, defence business is subject to competition in the lower tiers of
        the supply chain, including from abroad. Nuclear power competes with other fuels in
        power generation. In mid 2003, the prices for generated kWh are so low as to provide
        almost zero profit to any electricity generator – British Energy provides electricity at
        lowest marginal cost in the UK. As gas prices rise due to reducing North Sea
        production, electricity prices are expected to rise also. The UK‟s nuclear fuel cycle
        competes with producers from abroad, and does not have an exclusive market.

        The nuclear cleaning programme encourages competition from abroad for equipment
        and services. Realistically, most of the skilled and professional resources are UK
        based. (Ref 11)

        The advent of the Single European Currency has diminished trade barriers between
        European Countries and thus reduces national price differences. This will increase
        competition throughout the chemicals manufacturing industry on a European level.
        In addition, the increase in globalisation will mean companies in the UK will face
        greater competition both overseas and at home. This has meant that many
        companies are moving away from bulk/commodity chemicals, to higher added value
        chemicals, which could lead to UK manufacturers losing their bulk/commodity
        markets and may result in companies operating on a small scale within niche
        markets.

        The industry could be further disadvantaged by levies on feed-stocks and energy that
        are not applicable to operations in the remainder of Europe. The UK is not regarded
        as an advantageous location to base the „traditional‟ sectors of the industry. The
        reason is three fold: distribution costs are increased due to the UK‟s geographic
        position; currently, as a whole, the UK manufacturing sector is experiencing low
        growth; and patterns of global investment are favouring both the Middle East (low
        cost gas feed-stocks) and the Far East (where the markets are currently growing
        rapidly). (Ref 9, 18)

        The oil and gas industry faces comprehensive competition from other countries.
        The UK Offshore Operators Association (UKOOA) has outlined difficulties regarding
        the competitiveness of the industry within their 2002 Economic Report “Competing in
        a Global Economy”. The report highlights that the current performance experienced
        by the sector is not sustainable in the long term. This is due to the industry‟s high
        development and operating costs coupled with low output/production. In fact,
        operating costs are forecast to increase by 20% by 2010, while production is steadily
        decreasing. To aid competitiveness, the industry is working alongside the
        Government through the „PILOT‟ initiative to address a number of key issues
        (including supply chain and commercial efficiency). Thus, emphasis is being placed
        on implementing new technology and „contracting philosophies‟ to reduce United
        Kingdom Continental Shelf (UKCS) extraction costs. In addition, work is being carried
        out through the UK Norway North Sea Co-operation work group. The primary aim of
        this is to enhance cross border co-operation on issues such as infrastructure,
        transportation, operational synergies and mutual market access.

        In 2002, the chancellor announced the first essential changes to the North Sea fiscal
        regime in almost ten years. This had an inevitable impact on both competitiveness
        and investor confidence. The tax changes encompassed the following:
         The introduction of Supplementary Corporation Tax, at a rate of 10%, which
            increases the Corporation Tax rate to 40%.
         Introduction of a 100% First Year Allowance on investment.
         The Abolition of Royalty from 1st January 2003

        However, the Government has taken measures to „open up‟ the offshore market to
        smaller companies. This was brought about by lower licensing costs and the „fallow




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                                                         Cogent Market Assessment


initiative‟. The initiative was designed to increase momentum with regard oil and gas
activity, regenerating activity in assets and acreage. (Ref 16)

Within the UK petroleum industry, there are 169 identifiable brands currently
trading. This encompasses five incorporated multinational oil companies (BP, Esso,
Shell, Total (TotalFinaElf), and Texaco) who constitute around 58% of the sites with
61% of the volume. There are five multiple grocer retailers (Tesco, Asda, Sainsbury‟s,
Safeway and Morrison‟s) representing 9% of total sites with 24% of the volume. The
remaining 33% of the market generates 15% of the volume.

The number of filling stations has declined from 17,969 in 1993 to 11, 423 in 2002. At
the same time, the average size of sites is increasing (10mlpa for new sites, versus
current average of 3mlpa) with an additional focus on convenience marketing. This
has led to increase in the scope and quality of jobs on offer. Supermarkets within the
UK have dramatically increased their market share of petrol supply, and operate
approximately 75% of the larger sites. The increase in competition has led to the
inevitable closure of smaller, poorer located and rural filling stations. This problem
has been made worse by the environmental controls expected of every station,
regardless of size, presenting an added burden to small businesses.

Product distribution has largely been outsourced to haulage companies that can
achieve economies of scale by handling a variety of other products and servicing
many companies. (Ref 19)

There is currently overcapacity in refining in Europe, with gasoline and fuel oil
production exceeding demand. Within Western Europe, throughout the 100 plants, 42
companies are currently engaged in refining. In 2002, the industry experienced a 15
year historical low in refining margins. However, the market for kerosene and
gas/diesel is under supplied with a projected demand for these products over the next
20 years. Within the UK, there are only 9 refineries from 18 (in 1974) left in operation
today. These refineries have been built for maximum gasoline yield. With the demand
balance moving away from gasoline towards diesel, the refineries face the challenge
of securing large scale investment in new processes. (Ref 10)

Pressure is being placed on the UK polymer industry from new trading partners
such as China and India where they have the advantage of extremely low labour cost.
These pressures threaten the polymer industry and may force it to either relocate
outside the UK, taking advantage of a lower overseas cost base, or reduce
capacities.

Many larger UK polymer companies have sites across Europe. Although the
European plastics processing sector is a major player in the world market, it is being
increasingly exposed to international competition from high technology driven
countries (e.g. USA and Japan) and the low labour market cost countries (e.g. China,
Korea and Eastern Europe – but all with a rapidly increasing technical base).

In September 2001, the DTI produced a report stating that the USA is the leader in
identifying new market growth opportunities within the rubber and flexible foam
industries. If the UK is to compete in this area, the sector will need to develop and
enhance product development and niche production capabilities as low cost
production moves overseas, with Eastern Europe being the main threat on unit costs.
(Ref 23)

Other materials e.g. steel, aluminium and glass are increasingly being replaced within
products by polymers as advances in research and development mean new
applications for polymer materials are found. An example of this is the near „all plastic‟
washing machine and the increased use of plastics within signage. (Ref 27)




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1.2.3   Consumers

        In the past, the nuclear industry has suffered from the unfortunate image of secrecy.
        This resulted from the industries military origins, and the inherent culture of secrecy
        associated with the military programme. Unfortunately, many associate the nuclear
        sector with danger, pollution and nuclear „waste‟. Many fail to make the connection
        between the benefits of electricity and the nuclear power station. The nuclear industry
        has been slow to address this problem; however over the last decade substantial
        effort has been made to improve the openness of the sector. (Ref 1)

        The products developed by the chemicals industry are often essential to how
        modern society operates. However, the overall public perception of the industry
        continues to deteriorate. Currently, the percentage of UK consumers who perceive
        the industry to be favourable has dropped from over 40%, to approximately 20%
        since 1980. The primary reason for this is thought to be the perceived impact of
        chemical products on both the environment and health.

        Due to the above opinions held by consumers, there is an increasing importance
        being placed on higher technology products that have little or no harm on either
        individuals‟ health or the environment. (Ref 18)

        The petroleum industry continually seeks to enhance its environmental
        management processes. This is essential if the industry is to improve its standing in
        the eyes of the general public. This is the same in relation to the industry‟s
        procedures for emergency response. It is important that industry standards regarding
        these two issues are continually developed. In recent years, emissions from
        refineries, distribution and retail sites have been substantially reduced. (Ref 5)

        Consumers are becoming increasingly environmentally aware. The introduction of
        progressively lower sulphur fuel will enable more advanced engine technology and
        increase the life of exhaust catalysts fitted to modern cars. Thus, nitrogen oxide and
        other emissions will be reduced, having associated benefits for overall air quality.
        Alternative fuels such as autogas and biofuel are being introduced. (Ref 10)

        Consumers are increasingly accepting the replacement of traditional materials with
        polymers. For instance, the continuing increase of polymer use within car
        manufacture and the resulting decrease in weight of a car has led to substantial
        improvements in fuel usage.

        Certain markets pervaded by the polymer industry, for instance electrical goods, are
        influenced by fashion, such as the recent expansion in the market for brightly
        coloured vacuum cleaners. This means that some items are chosen as much for their
        aesthetic qualities as for their practical uses. Enhanced designs and design features
        will demand processors adopt and implement growing technological developments.

1.2.4   Globalisation

        In the UK, nuclear and radiological technology includes the processing of spent
        nuclear fuel from eight countries, with competition in this market mainly from France.
        The markets served from the UK include Japan, Germany, Switzerland, Spain,
        Sweden, Italy, Netherlands and Canada. In 2000, BNFL had orders worth £12 billion,
        of which two thirds were from overseas customers, primarily Japan.

        The industry has a significant international element of its business. The experience
        and skills held by the industry: reactor operation, design and construction,
        maintenance and inspection, waste management and decommissioning technology -
        provides significant export opportunities to a growing global market. Furthermore,
        many British nuclear companies have substantial business in nuclear sector markets
        abroad, especially in the USA.




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Throughout the world, there are currently around 440 operating nuclear power
stations. Within Central and Eastern Europe, the British nuclear industry is gaining an
important share of business to upgrade and improve safety. Furthermore, the British
industry is gaining contracts for providing components to both those regions and
countries in the Asian Pacific. (Ref 21)

Globalisation has lead to increasingly intensified competition across all aspects of
manufacturing. In fact, the chemicals industry is one of the most globalised of all
manufacturing industries, with the trend continuing. In an attempt to compete
efficiently, the chemical industry is continually improving sector performance by
improving efficiency, reducing waste and cutting costs. Currently, the UK chemicals
industry is the sixth largest in the world.

The result of globalisation has meant an every increasingly complex business
environment. It has led to a worldwide distribution of a multicultural workforce. Within
the industry, there is continued consolidation among companies on a global level,
with Glaxo Wellcome and SmithKline Beecham forming GSK, and Rhone Poulenc
and Hoechst forming Novartis.

Companies dealing in both speciality and bulk chemicals currently find it more
desirable to base operations overseas in the Third World and Middle East. This
allows companies to reap the benefits of cheap feedstock providing a cost advantage
in competitive export markets. (Ref 9, 18)

Within the oil and gas industry, increased globalisation has lead to UK companies
locating their operations where skills and raw materials are cheapest. In addition, it
facilitates an increase in the amount of trade between countries with the industries
products being available in almost every market in the world.

Globalisation has allowed UK oil and gas companies to develop their operations in
developing countries. The energy demand in the developed world is steadily slowing.
However, those countries within the developing world will require much more energy
in the future. According to Shell, the energy needs of the developing world have been
increasing by around 5% per annum – by 2020 they should account for more than
half of the total world energy consumption. Within the UK industry, approximately
50% of supply companies are active overseas with 4% of the world market. (Ref 22)

With UK companies operating on a global basis, those employed by the industry are
positioned throughout the world. Many of the UK workforces are based overseas in
Houston, Gulf of Mexico, Far East and South America. (Ref 16, 20)

The petroleum industry is becoming increasingly globalised with a decreasing
number of players. The policies and strategies of the large companies are managed
globally, with management within the UK focused on local operations. A great deal of
consolidation has taken place between the main players in the industry. For example,
out of the main top five companies operating today, four of those have been formed
from mergers, BP from BP/Amoco/Arco/Aral/Castrol, Exxon Mobil, Total
(TotalFinaElf) and Chevron Texaco. This has led to these multinational companies
having the strength to operate on a global level.

The issues on emerging technology are also dealt with on a global basis, through
alliances between the oil companies and the automotive manufacturers. The
legislation affecting the industries tends to be regionalised, with approximately 80% of
the relevant UK legislation being EU-wide.

The UK polymer industry is increasingly choosing to base its operations outside the
UK, in an attempt to take advantage of low labour and material costs. Globally, a
large number of mergers have taken place in the tyre industry. An example of this is
the consolidation between Sumitomo Rubber Industries and Goodyear in 1999.




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        Many UK polymer companies operate sites across Europe. The location of
        manufacturing operations throughout Europe is essential if the industry is to meet the
        challenges of a global market, allowing the UK polymer industry to operate as a
        supplier on a regional and global level.

        Similarly, “the UK rubber sector is increasingly part of the global market – its future
        depends on building distinctive competencies within this market environment”. (Ref 23)

1.2.5   Government Policy

1.2.5.1 The Climate Change Levy

        The Climate Change Levy has been signposted as having a significant impact upon
                                                       st
        the sector. The Levy came into force on April 1 2001, and represented a new energy
        tax within the non domestic/business sector. The cost of this is to be matched by an
        equivalent cut in employers National Insurance Contributions. However, information
        from companies shows that at best they will only recoup one fifth of the taxation. This
        will have an associated negative impact on the UK manufacturing base, in particular,
        the chemicals industry which with sales of £32 billion is one of the UK‟s largest
        manufacturing industries). The impact of the levy will produce a ripple effect that will
        weaken the competitiveness and attractiveness of the entire UK economy as a
        location in which to manufacture. (Ref 27)

        The Climate Change Levy also discriminates against nuclear power, although this is a
        carbon free source of electricity. (Ref 11)

1.2.5.2 The EU Chemicals Policy

        In 2001, a white paper was published entitled „Strategy for a Future Chemicals Policy‟
        addressing the perceived shortcomings of the current system. The paper relates
        primarily to the following legislation:

           Directive on the classification, packaging and labelling of dangerous substances
           Directive on the classification, packaging and labelling of dangerous preparations
           Regulation on the evaluation and control of the risks of existing substances
           Directive on restrictions on the marketing and use of certain dangerous
            substances and preparations.

        The White Paper is the initial stage in the redevelopment of the EC Chemicals Policy
        and introduced a new system of chemicals control for both new and exisiting
                                th
        substances. On May 7 , 2003 a draft proposal of the legislative proposal was issued
        for consultation by the European Commission. This will have cost implications for the
        industry, and may lead to revisions in work practices and skills requirements.

1.2.5.3 The Energy White Paper

        The Energy white paper, „Our Energy Future – Creating a Low Carbon Economy‟ was
                                    th
        published on Febuary 24 , 2003. It committed the UK to a 60% decrease in carbon
        dioxide emissions by “about 2050 with real progress by 2020”. The paper outlined a
        change in the direction of energy policy, stating that “there are important issues of
        nuclear waste to be resolved”. Although no proposals for new nuclear building were
        outlined, the paper did state that “nuclear power is currently an important source of
        carbon free electricity”. In addition, it does not rule out the possibility that in the future
        new nuclear build may be necessary if carbon targets are to be met. The industry is
        facing the challenge of attracting suitably skilled employees and in maintaining skills
        levels within what is regarded as a “sunset industry”, but which will, regardless of any
                              +
        new build, have a 50 year decommisioning task. (Ref 1)




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1.2.5.4 Powering Future Vehicles Strategy

       The Powering Future Vehicles Strategy aims to ensure the UK takes a leading role in
       the global shift towards low carbon transport by promoting the development,
       introduction and take up of new vehicle technologies and fuels. It also wants the UK
       automotive industry to be fully involved in new technologies.

       This has a major impact on the petroleum industry, both short term and long term.
       The strategy presents a new vision of the future direction of transport fuels – by 2050,
       the predominant transport fuel may possibly be hydrogen derived from renewable or
       low carbon energy sources. This influences thinking on short-term developments, and
       on the investment in technology that may have a shortened lifespan. (Ref 24)

1.2.5.5 Managing the Nuclear Legacy

       Published in 2002, the White Paper sets out the government approach and outlined
       new proposals for the “cleaning up” of the public sector civil nuclear legacy. The Bill of
       2003 mandates the establishment of a new national body entitled the Nuclear
       Decomissioning Authority (NDA), which will be tasked with the financial responsibility
       for all the public sector civil nuclear liabilities and assets under performance based
       contracts and will be charged with the “clean up” of nuclear sites. (Ref 25)

       The general duties of the NDA include:
           to promote and ensure the maintenance and development in the UK of a
              skilled workforce able to undertake the work of decommissioning nuclear
              installations and of cleaning up nuclear sites;
           to secure the adoption of what it considers to be good practice by the persons
              with control of designated installations, designated sites and designated
              facilities. (Ref 33)

1.2.5.6 Environmental Improvements

       The petroleum industry has taken steps to ensure compliance, and to establish self-
       regulation in excess of the actual legal requirements. Examples include the
       eradication of lead in petrol, reduction in benzene content to 1%, reduction in sulphur
       content to 50ppm from the previous levels of 2000-3000ppm, and a general reduction
       in aromatic content.

       Therefore, production methods and use of materials will continue to reflect
       environmental targets. For example, the aim of reducing sulphur content even further,
       making 10ppm sulphur fuel widely available by the end of 2004 and ongoing
       compliance with emerging legislation, will require continued additional investment in
       many cases. (Ref 24)

       Currently, there is a programme in progress to gain total vapour recovery by 2004.
       The majority of major companies are addressing this issue while the smaller
       companies lag behind. There is no industry standard for vapour recovery training. (Ref
       5)

       The sector is also having to make provision for dealing with government regulations
       on the recycling and management of waste. For example, the use of recyclate is a
       key aspect of a modern, sustainable and profitable business. Significant progress has
       been made – e.g. 200,000 tonnes of plastic packaging in being recycled, and
       approximately 50,000 tonnes is being exported – a doubling in the last 5 years. This
       is currently a major supply of raw materials. (Ref Defra WRAP Stakeholders Report)

       The UK tyre industry has set targets towards improving its environmental
       performance. Areas of concern for the industry include improving tyre design to




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reduce fuel usage and road noise; maximising recycling of tyres and sourcing
environmentally friendly raw materials. (Ref 34)

In essence, in the future there will be much more emphasis placed on „greener‟
products and protection of the envronment. The government continues to push for
advances towards the agreements laid down by the Kyoto protocol.

The Chemicals Agents Directive will mean an increased focus on health and safety
responsibilities by individuals across the industries.

The United Kingdom is one of 16 contracting parties to the 1992 OSPAR Convention
for the Protection of the Marine Environment of the North East Atlantic. The
Convention's main roles are to control disposal of all waste at sea and discharges
from land The Department for Environment, Food and Rural Affairs (Defra) is the lead
co-ordinating department for the UK. Another major contributing Department is the
DTI.

In July 1998, at the OSPAR Ministerial meeting in Portugal (Sintra), the section of the
Convention governing the disposal of offshore installations was reviewed and a new
regulatory framework - Decision 98/3 - now exists which no longer permits any
disposal at sea of offshore structures.

OSPAR has set comprehensive environmental goals for the offshore oil and gas
industry, together with the controls and management systems to deliver them. The
UK emissions trading scheme (set up in 2002) is a policy initiative which forms part of
the UK Climate Change Programme. Emissions Trading is an approach designed to
allow greenhouse gas emission reductions to be made in the most economically
efficient way. Emissions‟ trading is already being developed internationally – it is a
central part of the Kyoto Protocol, and the European Commission has also proposed
that EU-wide trading at company level should start in 2005.

Legislation dictates that the petroleum industry must ensure it is prepared for, and
can deal with an emergency. The sector‟s ability to meet this demand is some what
varied, with different methods and training employed. There is a need to employ
industry standards and systems comparable to that of the emergency services.

Over the next five years, a key aspect of legislation will be the introduction of sulphur
free petrol and diesel. Refineries will have to substantially upgrade desulphurisation
processes and technical changes are also needed in the way the fuel is distributed.
Legislation will also further tighten emission standards for refineries.

There will be key legislation developments within the forecourt retailing sector. These
may include the following:
 Emissions/vapour tight sites/stage two vapour recovery
 Removal of petroleum licensing / update petroleum regulations
 Chemicals storage and transportation
 Groundwater regulations
 Pressurised systems regulation
 Further controls on non flame proofed equipment such as mobile/video phones
 Changes to health and safety regulations

In the chemicals industry, there is now much greater emphasis on environmental
pressures e.g.
 Integrated Pollution Prevention and Control Regulations
 Water Framework Directive
 EU Strategies for Chemicals Testing




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                                                               Cogent Market Assessment


1.2.6   Technology trends

1.2.6.1 Nuclear and Radiological Technology

        Safety is a continuing concern of the UK nuclear industry and the industry is
        continuously enhancing safety technology. The designs of replacement reactors
        continue to be developed with ever increasing levels of safety. For example, the
        industry is implementing safety features into future reactor designs that use forces of
        nature as opposed to equipment intervention. The implementation of such features
        will reduce both the complexity and cost of the new reactors. Reactor research and
        development is increasingly internationalised and the UK industry has a stake.

        Waste disposal is a significant concern for both the industry and its stakeholders.
        Technical solutions are being developed for ultimate disposal. However, although
        technical solutions continue to be developed, UK government policy is lacking in this
        area. (Ref 25)

1.2.6.2Chemicals Industry

        Recently, the Chemical Industries Association launched a report entitled „Trends and
        Research Priorities for the Chemical Industry – Looking to the Future.‟ In addition to
        other information, the study provides market information and intelligence on research
        and development needs and issues. The primary science and technology research
        priorities can be placed into the following three broad headings:

           Pacing Technologies – e.g. Bioscience, Catalysis, Combinatorial Technologies,
            Nanotechnology and Process Intensification.
           Key Technologies – e.g. Computational Technology, Environmental Technology,
            New Materials Research, Measurement Sciences, Formulation and Separation
            Sciences.
           Platform/Base Technologies – e.g. each division of chemistry and chemical
            engineering and their interface with additional disciplines (for example, materials
            and biotechnology) – This is an area of significant growth.

        The report highlights that high–growth areas (e.g. pharmaceuticals and high value
        added chemicals) should be given future support. In addition, there will be increasing
        importance placed on speciality or „effect‟ chemicals. Furthermore, the commodity
        area of the UK industry remains significant and is necessary to support the high
        growth sectors.

        The continuing evolution of IT will result in technological implications for the UK
        chemicals industry, especially those segments of the industry that supply the IT
        sector.

1.2.6.3 Oil and Gas Extraction Industry

        The oil and gas industry is continually developing technology to achieve and exceed
        environmental performance. Therefore, the industry is constantly minimising the
        inevitable associated impact that oil and gas extraction has upon the environment.
        New design projects for platforms are ongoing, incorporating technology to address
        environmental issues. For example, advances in the elimination of oil in produced
        water discharge, waste heat recycling and maximising efficient use of gas. Operators
        are also continually developing waste reduction and recycling technologies, such as
        the recent work to recycle drill cuttings.

        Another key change is in the area of exploitation of mature fields and new field
        discoveries. The companies operating in the UKCS are constantly improving recovery
        technology, allowing formerly non-viable discoveries to be exploited and the life of
        current fields to be extended. The newer discoveries also tend to be in deeper
        waters farther offshore, requiring new techniques to be developed. (Ref 20)



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                                                              Cogent Market Assessment



1.2.6.4 Petroleum Industry

       The key area of technology change relates to long term changes in the nature of
       transport fuels and engines. There is a program of incremental improvement in the
       quality of existing fuels, coupled with a shift from petrol towards diesel, and the
       introduction of new fuels. These could have a major impact on the nature of the
       sector. It is vital that the UK industry plays a major role in the development of these
       new technologies in order to stay competitive in the longer term.

       The immediate technical challenges to move to „sulphur free‟ fuel (10 parts per million
       or less of sulphur), commencing during 2004. This will supply fuels that enable
       advances in engine technology, leading to more efficient motive power with less CO 2,
       NOX, SO2 and other particulates.

       Another primary area of technological change is in the vehicle loading/discharging
       operation and control room activities. There has been an introduction of on board
       computers and sealed parcel vehicles – creating a skills gap among drivers. This type
       of technological change has lead to drivers becoming more self managed. However,
       there is inadequate support training in this area. (Ref 5)

       Developments within refineries have included the centralisation of control rooms and
       application of advanced control systems, leading to improved plant efficiency and
       available capacity (uptime).

       Electronic data exchange will be a key technological development in the near future.
       This will be focused upon new business providing electronically delivered services to
       the industry, especially traders.

1.2.6.5 Polymer Industry

       The UK‟s plastics industry continues to be a world leader in material specification and
       design. (Ref 35)

       The polymer industry is also developing technology to limit any adverse impact the
       sector has upon the environment. Discarded plastics and packaging add to the
       growing problem of municipal solid waste. Currently, research and development is
       being undertaken to develop recyclable polymers. Both biodegradable polymers and
       „solid state shear pulverisation‟ (recycling of unsorted pre or post consumer waste)
       are examples of technological developments thus far.

       Moreover, the polymer industry is implementing research and development
       programmes for polymers in electronics and work is being carried out into
       biopolymers, including work into those originating from natural sources and synthetic
       polymers that are compatible with bio-systems.

       The emergence of engineering and speciality polymers has opened the door to new
       and novel applications. The availability of more sophisticated polymer materials has
       been brought about by the technical advances in materials and conversion
       technology is leading to increased substitution of other materials such as steel,
       aluminium, glass and wood with polymers.

       Smart materials, materials and structures that can impart information about their
       environment to an observer or monitoring device, are now being applied in
       engineering, optical and medical technologies. These technological advances are
       ongoing. Although progressive changes will continue, technology trends are also
       being driven by demands of the customer, influencing the earlier adoption of new
       technology by industry. (Ref 36)




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1.2.7   Sustainable development

        Sustainable Development is often defined as development that meets the needs of
        the present without compromising the ability of future generations to meet their own
        needs. Therefore, it can be seen as the patterns of production and consumption that
        can be taken into the future without degrading either the human or natural
        environment while doing so.

        In Nuclear and Radiological Technology the white paper “Managing a Nuclear
        Legacy: A Strategy for Action” was published in July 2002, setting out the
        government approach towards the “cleaning up” of the public sector civil nuclear
        legacy. This is an important step to demonstrating the sustainability of the industry.

        The Department of Trade and Industry produced a white paper, “Our Energy Future –
        Creating a Low Carbon Economy”, outlining a change in direction for energy policy.
        Among other targets, the paper states the target of cutting the United Kingdom
        carbon dioxide emissions by some 60 per cent by about 2050, with real progress by
        2020. In addition, it also stated the aim to ensure renewable energy made up 10 per
        cent of United Kingdom electricity by 2010. It stated that “nuclear power is currently
        an important source of carbon free electricity….Important issues regarding the clean
        up of nuclear waste are to be resolved.” (Ref 37)

        In the chemicals manufacturing sector, the Responsible Care programme is in
        operation. Members of the Chemicals Industry Association are committed to ensuring
        chemicals are made, distributed, used and disposed of safely. Members are
        continually working with other organisations, government and local communities to
        ensure this is maintained. Since 1989, chemical companies throughout the United
        Kingdom have been committed to an international programme termed „Responsible
        Care‟. This means that companies place the protection of health, safety and the
        environment at the heart of their operations.

        In 2001, the European Commission published a white paper entitled „Strategy for a
        Future Chemicals Policy‟. The basic aims of this white paper are fully endorsed by the
        Chemicals Industry Association. The white paper proposes that in order to enhance
        protection of human health and the environment, legislation for „new‟ and „existing‟
        should be bundled into one. It recommends all chemical manufacturing over one
        tonne be tested and registered. The heart of the white paper stipulates the setting up
        of a regulatory system termed „REACH‟ (the Registration, Evaluation and
        Authorisation of Chemicals).

        The UKOOA Sustainability Strategy - „Striking a Balance‟ - was published in 2002,
        and is the first attempt at setting out a strategy for sustainable development in the
        upstream oil and gas sector. Furthermore, it is the first step in defining the sectors
        relationship with society as a whole (their interactions, impacts and responsibilities).
        The Sustainable Development Commission has provided an encouraging appraisal of
        „Striking a Balance‟. The strategy document outlines 58 commitments in areas of
        economy, environment, society and stewardship. In addition, an extra five are
        included relating to key processes for delivery, performance measurement and
        reporting, stakeholder engagement and best practice sharing throughout the industry.

        The role of the petroleum industry as the supplier of energy for transport makes it a
        key player in the move to a sustainable future and we expect significant changes to
        take place in the nature of the sector. This will include changes in the type of energy
        source used as input, changes in the nature of fuels delivered to vehicles, and
        changes in the nature of the manufacturing process. The industry has a major role to
        play in the development of long term strategic goals as well as ensuring that the best
        environmental result is achieved from existing technologies during the transition.




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                                                                Cogent Market Assessment


      The main environmental issues being addressed by the Petroleum Industry are:

      Acidification
       European Commissions Acidification Strategy
       1999 Gothenburg Protocol
       EU National Emissions Ceilings Directive
      Vehicle Emissions
       introduction of fuels that facilitate improvements in engine and exhaust treatment
          technologies (Auto-oil)
      Ozone
       National Emissions Ceilings Directive (NECD) – European Commission Directive.
       Clean Air for Europe (CAFE) approach.
      Climate
       The climate change programme – United Kingdom Government Initiative. This
          programme sets out the country‟s response to the worldwide call for increased
          action regarding climate change. The initiative begins to lay the foundation for
          more fundamental changes in the years to come. Many of its policies and
          measures will deliver cuts beyond 2010. The United Kingdom Petroleum Industry
          Association (UKPIA) is working with the government on many initiatives regarding
          all of the above environmental issues (Source Document 10).

      As previously stated, the industry has been proactive in seeking to reach or exceed
      the environmental challenges presented to it – for instance, the reduction in sulphur
      levels in fuel, and the increased efficiency of refineries leading to a significant
      reduction in emissions.

      Key to the sustainable development of polymer industry is the need to ensure the
      following:
       Increased production efficiencies to reduce energy usage
       Increased production quality leading to lower scrap rates, to reduce energy
           consumption
       More workforce awareness of the need to conserve energy usage
       Improved technical capability to allow greater use of recycled materials.

1.3   THE CURRENT STATE OF PLAY

      Nuclear and radiological technology within the UK provides direct employment for
      around 46,000 throughout the UK, and generates work for approximately another
      10,000 throughout a relatively wide UK geographical spread. (Ref 1)

         The annual turnover of the sector is approximately £5bn (2000 figure).
         The estimated contribution to national GDP is in the region of £3.3bn (2000
          figure).

      The civil nuclear sector currently provides over 20% of the UK‟s electrical power
      generation capacity. This is likely to decrease in coming years, nevertheless, a
      significant clean-up programme is planned equating to over £47billion over the next
      50 plus years.

      The DTI White Paper entitled „Our Energy Future – Creating a Low Carbon Economy‟
                        th
      published on 24 February 2003 states “Nuclear power is currently an important
      source of carbon free electricity. However, its current economics make it an
      unattractive option for new, carbon free generating capacity”.

      However, although the paper did not contain any proposals for new or replacement
      nuclear build, it did state the following: “We do not rule out the possibility that at some
      point in the future new nuclear build might be necessary if we are to meet our carbon
      targets”.




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                                                        Cogent Market Assessment


   The UK‟s nuclear power saves as much carbon as all the cars on Britain‟s roads
    use.
   In 2001, the nuclear industry contributed to approximately 0.1% of GDP in
    relation to processing nuclear fuel, reprocessing of spent fuel and treatment of
    nuclear waste. (Ref 38)
   Investment within the nuclear sector constituted 0.4% of all industrial investment
    and 1.2% of investment made by the energy industries in 2001 (Ref 38).
   The nuclear sector plays a significant role within the UK‟s Defence Policy.

Nuclear power is experiencing a continuing expansion in a number of world markets.
Thus, nuclear power is high on the programme of business opportunity in North
America (where UK companies have a substantial stake). This reinvigoration of
nuclear energy is based on both substantial worldwide improvements in nuclear
productivity and safety, and escalating fossil fuel prices.

   British Energy has invested in nuclear plant operations in both Canada and the
         US.
   BNFL owns one of three global reactor technology companies.
   Many companies within the UK supply chain are incorporated into the global
    market.
   Energy consumption in the world has risen by 3.3% per annum over the past 30
    years. Nuclear power has maintained its share of world electricity production at
    roughly 17% since 1990. (Ref 39)
   The vast majority of reactors likely to be in operation in the world by 2020 are
    already in service today.

The chemicals manufacturing industry is a core element of the UK manufacturing
sector. Within key regions across the UK, the chemicals industry is a significant
employer and contributor to added value. The current size of the industry is
comparative to that of the UK economy, making a positive contribution to the UK
balance of payments. The position of the industry within the current UK economic
climate can be seen in the following light:

   In 2001, the chemicals industry employed 170,000, with a comparatively high
    percentage being employed in SMEs when compared to France and Germany.
   The industry contributes approximately 2.5% of UK Gross Domestic Product
    (GDP).
   The chemicals industry contributes 11% of manufacturing industry gross added
    value.
   In 2001, capital investment stood at £2.7 billion, representing 16% of total
    manufacturing investment. Annually, the industry spends around £3billion on new
    capital investment.
   On a domestic basis, the chemicals market stands at £23.7 billion. Demand
    originates from all sectors of UK industry.

The UK chemicals industry is the sixth largest in the world; this equates to roughly
three percent of world chemicals production.

   In 2001, the UK had a positive trade balance in chemicals (£2.4 billion). This
    positive situation has been sustained over a long period of time.
   Sales of UK manufacturing chemicals (excluding pharmaceuticals) are worth
    £26.1 billion. This figure represents 7% of value added in UK manufacturing.
   The UK has a relatively high proportion of speciality chemicals and consumer
    products within its chemicals portfolio. The speciality business, as a percentage
    of total UK chemicals business, is greater than all the UK‟s major competitors
    except Italy.

There are a number of economic factors that attribute to the struggle for profitability.
Namely, those factors that impact upon the UK‟s performance relative to Europe, the


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                                                       Cogent Market Assessment


strength of the pound against the Euro, or the UK‟s position within Europe in
comparison to the rest of the world, and in particular the potential financial burdens
associated with the EU chemicals strategy.

   The Middle East and Far East are expected to capture the bulk of global growth
    in petrochemicals.
   Ethylene capacity is predicted to grow in the Middle East by 8 – 10% per annum,
    Far East and Latin America 6 – 8% pa and Europe by 2% pa.         (Ref 2, 18)

The Oil and Gas Extraction Industry within the UK supported over 265,000 jobs
across the UK in 2002.
 In 2001, the UK was ranked the fourth largest gas producing country and the
    tenth largest oil producer in the world.
 The UK economy has benefited from £190billion (2002 prices) in North Sea
    Taxes since the mid-1960s. Government tax revenues have been strong in recent
    years, with the impact of high crude prices more than offsetting the production
    decline and adverse exchange rate movements.
 The UK Treasury estimates that North Sea taxes in 2002 were at £4.9 billion.
 The industry has invested £205 billion (2002 prices) in the exploration and
    development of the UK offshore sector since activity began in the mid 1960s.
 Over recent years the North Sea industry has represented 17% of total UK
    industrial investment. In 2002, total industry expenditure (on exploration,
    development and operating costs) was in the region of £8.5 billion.
 Approximately half of the UK oil and gas reserves (24-32 billion boe) are yet to be
    produced. (Ref 16)

However, in 2002, UK production of crude oil and Natural Gas Liquids (NGLs)
decreased by 0.6% compared with 2001, to 115.9 million tones.
 There is a general decline from older established fields, with only eight new fields
    starting production in 2002 accounting for 1.4% of total production.
 During 2002, the UK retained its position as a net exporter of oil and oil products.
    However, it was 6.5% lower than in 2001. In addition, net exports of crude oil and
    NGLs decreased in 2002 by 9.2% equating to 32 million tones. (Ref 40)
 UK production of natural gas in 2002 was 2.6% lower than in 2001. (Ref 38)

From an international perspective, following the September 11 2001 terrorist attacks
on the USA, the market was unable to hold prices $22-28 per barrel on Brent oil
(OPEC target range for the crude basket). The result was an associated impact on oil
demand.
 In 2001, world oil consumption was down marginally on the year before (the first
    decline since 1993). During 2001, Europe and Africa were the only regions to
    register consumption increases.
 In 2001, world consumption of natural gas grew by 0.3%, a drop from the 4.3%
    increases recorded in 2000.
 The Middle East was the fastest growing gas production region in 2001 (driven by
    the expansion of Qatari and Omani liquefied natural gas exports). (Ref 41)

The UK is amongst the leaders in Europe in the introduction of cleaner fuels, with the
petroleum industry introducing virtually sulphur free petrol and diesel.
 Exports of petroleum products in 2002 were 12.0% higher than in 2001
 Oil demand in the UK is mainly for transport: this demand has been reducing by
    1% per annum, as the increase in engine efficiencies outweighs the increase in
    traffic.
 The industry generates annual sales of some £40 billion – HM Treasury receives
    approximately £26 billion through duty and VAT
 At the end of 2002, there were 11,707 sites retailing over 36 billion litres of motor
    fuel. (Ref 19)
 The average volume per site is 3.1 million litres per annum. (Ref 19)




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Forecourt retail sites require incredibly high safety standards, due to the hazardous
nature of the product being handled by the general public in an urban environment.

The Polymer industry is generally reported in two parts, covering plastics and
rubber.

   The UK polymer sector is essential to the success of many other UK industries,
    including construction, packaging, aerospace, automotive and domestic
    appliance manufacture. Plastics accounts for UK sales approximating £17.6
    billion.
   Polymer usage is increasing at an average rate of between 3-4% per annum. In
    2002, the UK consumed approximately 4,750 k tonnes of plastic.
   Increasing competition from developing countries as well as customer
    requirements are resulting in an increased focus on research and development
    and innovation. Dyson is a prime example of this, where manufacture of upright
    vacuum cleaners has been moved to the Far East while its research and
    development facility remains in Britain.
   When compared to the manufacturing industry as a whole, the plastics industry
    turnover has grown overall by 14.4% between 1995 and 2000, as opposed to
    11.0%.
   When compared to the manufacturing industry as a whole, the rubber industry
    turnover declined by 9.5% between 1995 and 2000, as opposed to a growth of
    11%. However, year on year changes in the rubber industry have been erratic.
   Gross value added at basic prices increased by some 15.3% between 1995 and
    1998, only to dip marginally in 1999 and 2000. (Ref 27)

At a pan-industry level, Germany, France and the United States demonstrate a labour
productivity advantage over the UK within a number of sectors including
manufacturing. However, Britain leads all countries (France, Germany and the US) in
mining and extraction (Ref 30).




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                           SECTION 2: CHANGING SKILLS NEEDS


2.1     Employment patterns

2.1.1   The number of employees within the sector is continuing to fall, whilst productivity
        continues to rise. The UK distribution of employment is as follows:

            AREA          NUCLEAR     CHEMICALS      OIL &         PETROLEUM     POLYMERS
                            (Ref 1)      (Ref 2)    GAS (Ref          (Ref 31)     (Ref 27)
                                                        3)
         Scotland         Not         10,200        52,917         9,840         17,160
         Northern         available   ??            1,707          8,610         ??
         Ireland
         Wales                        8,500         3,414          11,070        16,302
         North West                   34,850        8,535          13,530        252,538
         North East                   30,600        10,242         7,380
         Yorks      &                               13,656         12,300
         Humber
         West                         23,800        11,949         4,920
         Midlands
         East                                       11,949         9,840
         Midlands
         South West                   8,500         3,414          8,610
         South East                   53,550        44,382         16,605
         London                                                    3,690
         East     of                                8,535          16,605
         England
         TOTAL            56,000      170,000       170,700        123,000       286,000

2.1.2   Recent and Expected Changes in Employment

        Across the industries, companies have not been major recruiters for some time.
        However, recruitment needs are changing. Many companies may be recruiting
        sizeable numbers of young people, graduates and adults over the next decade.

        Nuclear and Radiological Technology
                                                             th
        The Energy White Paper published on February 24 , 2003 stated that there are no
        immediate plans for new nuclear build. This may have associated future impact upon
        the employment within the industry. However, the government also published a White
        Paper entitled „Managing the Nuclear Legacy, a Strategy for Action‟ published on July
         th
        4 2002. Within this it states a Nuclear Decommissioning Authority will be tasked with
        the clean up of nuclear sites (where the task is wholly the responsibility of
        government). This is a large undertaking, with estimated work worth £47 billion over
        the following 50 years. This may lead to an increase in the need for skilled
        employees, thus having a positive impact on employment within the industry.
        Employment is expected to maintain constant for at least the next 5 years.

        Chemicals Industry

        The UK bulk chemicals sector was originally dominated by ICI. However, as ICI
        began to change focus and direction, a wide range of international companies have
        invested in previous ICI businesses. This has led to associated employment
        opportunities for the UK chemicals workforce. For example, US based company
        Huntsman acquired $2.5 billion of ICI‟s operations in 1999. Since then, they have
        invested over $225 million, showing their commitment to the UK. (DTI – Invest UK,
        September 2002)




                                                                                              23
                                                         Cogent Market Assessment



During 2003, Japanese chemicals company Nippon Gohsei are to open a chemicals
production facility in Hull, bringing 70 permanent jobs to the UK chemicals industry.
(DTI)

Oil and Gas (Upstream) Industry

Between 2000 and 2001, the oil and gas industry increased recruitment of technician
apprentices from 20 to 150.

The oil and gas sector is subject to cyclical employment trends. Thus, the nature of
the industry has caused many experienced professionals to leave the industry or
country seeking further opportunities or security. This situation is exacerbated by lack
of investment in training and development and low recruitment when oil prices are
low.

During the initial months of 2003, there were a number of key developments within
the UKCS that have facilitated changes in employment. These came in the form of
both new investment opportunities in, and new entrants to, the North Sea industry.

In January 2003, a US based firm, Apache, had confirmed that it would be locating its
operations office for the Forties field in Aberdeen. Thus, Aberdeen will become the
base for a significant new entrant to the North Sea. The purchase of the Forties field
by the company is partly a result of the licence transfers in response to the
government and industry initiatives through PILOT (the oil and gas industry task
force), allowing independent companies to follow up prospects in fields larger
companies do not consider a main element of their future plans. Apache has provided
employment offers for the complete BP Forties team both offshore and onshore.

In February 2003, a significant new player entered the UK offshore industry. Perenco
decided to set up business in the UK, buying 14 North Sea gas fields and connected
pipelines from BP – coupled with the BP share of the Bacton gas terminal. (Source DTI
Press Release 13th February 2003)

New investment opportunities in the North Sea have been facilitated by the Fallow
Initiative, developed by the DTI with PILOT. This joint initiative between government
and industry ensures that North Sea assets can be fully exploited. In total, 77 blocks
and discoveries are to be made available. Among other key aims, PILOT aims to
achieve the creation of 100,000 more jobs before 2010 (in addition to earlier
forecasts). (Source DTI Press Release 6th March 2003)

The new employers entering the UK-based industry have extensive experience in
operating mature fields to prolong life, and therefore prolong employment.

The (Downstream) Petroleum Industry

Refineries have evolved over time to address specific market needs for fuels and by-
products, and to address specific legislation.

Refining is becoming more sophisticated and operators need the skills to manage
high technology central computerised control systems. Safe operation of plant is of
primary importance, as is the minimisation of environmental impact of both the
production and the end product.

In retailing, the larger petrol stations are focussing on convenience or are part of a
supermarket or part of a motorway service area. This has changed the nature and
scope of petrol station employment considerably and increased manning levels in the
large sites. By contrast rural petrol stations are suffering from a combination of fierce
competition from supermarkets and increasing environmental controls. This is leading




                                                                                      24
                                                                 Cogent Market Assessment


        to ever increasing numbers becoming economically unviable and thus many must
        cease trading or diversify in order to remain viable.

        Polymer Industry

        Generally, employment within the polymer industry is decreasing (as defined by SIC
        25). Furthermore, this trend is likely to continue unless greater focus is placed on
        higher end skills and the industry diverted from competing with low cost markets in
        the Far East and Eastern Europe.

        Recruitment of young people, especially into formal polymer apprenticeships, has
        declined in recent years. (Ref 7, 8)

        Labour Turnover

        Information on labour turnover across the industries is not currently available.

2.1.3   Regional clusters

        Nuclear and Radiological Technology

        The majority of all of the UK employment regarding nuclear fuel processing is
        concentrated in North West England. In the South East and London region (Harwell,
        Culham and Aldermaston) there is a significant nuclear industry cluster. The nuclear
        fusion research centre is based in Culham. Caithness has a large decommissioning
        task, and the Ministry of Defence operates large nuclear shore support base in
        Western Scotland.

        Chemicals Manufacturing

        Within the North East of England, the chemicals (organic) industry contributes almost
        25% of the UK employment base. There is a strong core of 30 organisations
        producing organic basic chemicals. The North West accounts for over 55% of the UK
        basic inorganic chemicals, thus providing significant employment for the industry.
        Yorkshire and Humber is also a key region for employment within the UK chemicals
        industry, employing 32,000 people. Within West Yorkshire, speciality chemicals
        including dyes and pigments are produced by 25 firms, employing 4,400. This
        accounts for 40% of the UK total for this SIC Code. (Ref 13)

        Oil and Gas Extraction

        A significant proportion of employment in the extraction and production of oil and gas
        and the supply of services to the production industry is centred in Scotland. In fact,
        Scotland is home to 74% of UK employment in these two industries, the majority of
        which is based in the vicinity of Aberdeen. The second largest concentration of
        employment is found in the headquarters functions of the oil and gas companies, in
        London. The UKOOA Economic Report 2002 stated that 6% of Scotland‟s workforce
        was either directly or indirectly supported by the offshore industry. Approximately 400
        businesses in the East of England can be identified as being related to oil and gas,
        mostly regional offices of operating companies, small engineering companies and
        consultants. (Ref 16)




                                                                                            25
                                                                Cogent Market Assessment


        Polymers Industry

         Within the East Midlands, plastics products are produced for both the automotive and
        food industries. This cluster has grown by 50% since 1991 and employs 21,000
        people. The West Midlands accounts for 30% of UK employees producing synthetic
        rubber. The South East is home to the largest concentration of polymer companies in
        the UK (1,045), although it is not recognised as a cluster. The North West is home to
        one third of the UK„s employment producing plastic in primary form, with 135
        organisations employing 31,000 people, an increase of 50% since 1991. Polymer
        clusters are stated by DTI to exist in East midlands, North West, North East, Wales
        and the West Midlands. (Ref 27, DTI)

        Petroleum Industry

        Stabilising, Refining and Manufacturing activities are focused around the refinery
        locations in Scotland, Wales, Yorkshire & Humber, East England, and North West
        England. Storage Blanding & Distribution has a similar profile, although with a greater
        spread throughout England. Heating Services/Distribution and Forecourt Retailing
        activities are spread throughout the UK, with no recognised clustering other than a
        presence in relation to area population. (Ref 5)

2.1.4   Occupational shifts

        The oil and gas industry is one of great uncertainty and variation. This point is backed
        up by the industry Skills Foresight Survey, in which it states that 41% of companies
        are undecided as to whether they will change their employee requirement over the
        next 12 months (2000 – 2001). Therefore, mapping expected occupational shifts is
        relatively difficult. However, the Skills Foresight Survey provides data that gives an
        indication as to the outlook regarding increases and reductions in various industry
        occupations. (Ref 3)

        Predictions on workforce change in the chemicals and polymers industries vary by
        occupation. The largest changes are expected to be in Process Operations,
        apprenticeships, and professional positions, with 25%, 31% and 25% of companies
        predicting an increase in 2003-2004. In 2005-2007 these predictions change to 33%,
        24% and 34% of companies. The vast majority of companies expected all
        occupational roles to, in the main, to stabilise. (These figures take no account of
        replacement demand). (Ref 2)

        For the petroleum and nuclear industries, overall employment (as defined by SIC 23)
        is predicted to fall by 16% between the base years of 1999 and 2010. The most
        notable changes are expected in administration and clerical occupations (down by
        34.9%), elementary clerical and service occupations (down by 25.1%) and process
        plant and machine operatives (down by 15%). (Ref 12)

2.1.5   Trends in replacement demand

        The data demonstrates the trends associated with businesses replacing staff as
        required. This may be the result of natural wastage (e.g. retirement) or people
        changing jobs. As with all data sourced from the Skills Dialogue, Institute of
        Employment Research (IER) analysis has been used and is limited to a two digit SIC
        code. Therefore the data, although providing an adequate picture, is related to a
        broad sector grouping.




                                                                                             26
                                                                      Cogent Market Assessment



                           Projected New Entrants by Main Occupational Groups 1999 – 2010
                      Manufacture of Chemical products, rubber, plastic and other wood products
                                                 Employment      Expansion      Replacement     Net New
                   Occupational Group                1999         Demand          Demand      Entrant Needs
         Corporate Managers                         27298           -2791          4744             1953
         Science/Technical Professionals             7806            -15           2347             2332
         Business/Public Service Assoc Prof         11769           -495           8566             8071
         Skilled Metal/Electrical Trades            18605           -2979          12240            9261
         Process Plant and Machine Ops              50359           -7745          39312           31567
         Transport Drivers and Operatives           23581           -2893          14718           11825
         Elementary: Trades/Plant/Machinery         26675          -2352           24279            21927
                          Projected New Entrants by Main Occupational Groups 1999 – 2010
                  Wholesale and retail trade and manufacture of coke, refined petrol and nuclear fuel
                                                  Employment     Expansion      Replacement        Net New
         Occupational Group                         1999          Demand          Demand        Entrant Needs
         Science/Technical Professionals             2521            -76           1486             1410
         Business/Public Service Professionals       794             -6             151             145
         Science Associate Professionals             1097           -193            397             204
         Business/Public Service Assoc Prof          1422           -128           1051             923
         Skilled Metal/Electrical Trades             4522           -818           3663             2845
         Process Plant and Machine Operatives        2767           -416           1287             871
         Transport Drivers and Operatives            2390           -278           1327             1029
         Elementary: Trades/Plant/Machinery          1159            46             992            1038
                                                                                                  (Ref 12)

        The main trend is for a decline in recruitment due to expansion, but a significant level
        of replacement demand due to age demographics.

2.1.6   Trends in qualifications requirements

        Previously, the science and technology workforce (in its broad sense) has been
        shown to be highly reliant on high level qualifications at both degree and sub degree
        level. Thus, due to predicted growth in these occupations, a closer relationship
        between this labour market and Higher Education will have to be fostered.

        There has been a steady decrease in the relative number of individuals passing „A‟
        level mathematics and physics. In addition to this, there has been a perceived drop in
        the standard of mathematics at both GCSE and „A‟ level. This trend is of concern to
        all industries, with mathematics and physics being core qualification requirements
        across the sector.

        The position in Scotland shows a reversal of the trend, with entries at Higher level in
        Mathematics, Chemistry, Physics and Geography all showing a marked rise between
        2000 and 2001. The pass rates have remained relatively static. (Source: SQA 2001 Annual
        Statistical Report, SQA, 2002)

        Modern Apprenticeships remain vital to the sector as a whole, and frameworks are
        maintained for all appropriate areas, as shown in appendix 7. In due course, Cogent
        needs to extend provision, to ensure that new industry-specific markets are covered.

        Foundation degrees also form part of the new qualifications framework in England
        and Wales. Cogent will assist in the development of foundation degrees where there
        is recognised employer demand.




                                                                                                       27
                                                                 Cogent Market Assessment


2.1.7   Trends in skills requirements and skills use

        Although the nuclear sector does not have an immediate overall skills shortage, the
        health sub-sector currently has a shortage of people with radiological skills. Current
        skills „hot spots‟ are present. Examples include:

            Radiological protection – health physics
            Regulation
            Modern Apprenticeships
            Critical assessment
            Control and instrumentation
            Project management
            Radiochemistry
            Nuclear education in higher education
            Safety case writing
            Nuclear safety research
            Numerate graduates
            Corporate capabilities (Ref 1)

        In chemicals manufacturing, key skills deficiency can be seen in relation to the area
        of control technology. Roles affected currently include process operators, craft grade
        engineers and managers and supervisors. Management skills are also highlighted.
        (Ref 2)

        Within the oil and gas industry, the present recruitment difficulties appear to mirror
        future problems. Therefore, present and future skills shortages can be deduced as
        lying in the managerial and technical areas. (Ref 3)

        The petroleum industry Foresight on Skills provides data demonstrating the primary
        skills gaps within the industry. The survey consulted employers who were asked in
        which skills areas the shortfalls existed. Technical and practical skills formed the most
        common response given, with variations in each sub-sector. (Ref 5)

        Key skills shortages and gaps identified in the rubber industry include soft skills such
        as communication, through to technical skills directly related to the job. Management
        skills were also highlighted. (Ref 7)

        For plastics, more than 40% of companies surveyed claimed skills gaps in Plant and
        Machine Operations, and just under 40% in management and supervisory roles. (Ref
        8)

        In comparison to the UK average, the Employers Skills Survey (2002) highlighted
        skills shortages among professional, associate professional occupations and in
        skilled trades. In addition, vacancies for skilled trades‟ occupations were concentrated
        within manufacture and distribution. Thus, within the manufacturing sector the key
        problematic areas were within skilled trades and operatives. In excess of fifty percent
        of hard-to-fill and skills-shortage vacancies were for people within these two
        occupational groupings. (Ref 29)




                                                                                              28
                                                         Cogent Market Assessment


Summary of Major Skills Gaps and Anticipated Changes

Nuclear and Radiological Technology

Although there are no immediate skills gaps within the sector, the following is
anticipated within the next five years.

By 2007, current suggestions show that the four remaining Magnox reactors will have
been closed. Thus, these sites will transfer to the nuclear clean up programme with
associated skills changes. However, the four stations generate limited UK electricity
capacity. In addition, this type of technology would not be used in any future power
generation programme. Therefore, the loss of skills uniquely related to this type of
technology would have no affect on the ability to keep the nuclear option open.

However, a loss of more generic nuclear skills such as safety or maintenance skills
may impact upon future capabilities. (Ref 1)

Chemicals Manufacturing

Within the chemicals sector, the most notable skills deficiencies are within the area of
control technology. The roles currently affected include process operators, craft grade
engineers, managers and supervisors.

In addition, there is an increasing need for graduates to have experience of a broader
range of multidisciplinary skills. This trend is expected to continue for the next two to
three years, and has been primarily attributed to changes in working practices,
technological innovation and legislation. (Ref 12)

Oil and Gas (Upstream)

In the future, it is anticipated that the main skills deficiencies recognised by the
industry will be greatest in the managerial and technical fields.

The challenge for effective exploitation of new technology has been identified by the
recommendations formulated from the PILOT‟s Innovation and Technology Group.
Against this background, the Foresight survey highlights deficiencies in managerial
skills, within Design and Construction, Terminals and Installation & Abandonment.

The extent of skills shortages in the future will largely depend on the level of
employment within the industry. (Ref 3,17)

Petroleum (Downstream)

Within the petroleum sector, the industry faces key skills shortages in technical skills,
ADR for drivers and communication skills for those in forecourt retailing.

In addition, the industry is currently experiencing key skills gaps in IT, health and
safety and in the field of hazardous electrical equipment. It is anticipated that future
skills gaps will grow in these areas. The Foresight on Skills (2002) survey has stated
that 39% of employers expect the situation to worsen, while 19% expect it to improve.

Within the sector, there needs to be improvement in communication, management
and project management. (Ref 12)

In the sub-sector of Storage, Blending and Distribution there has been key
technological change in the vehicle loading/discharging operation and depot control
room operations. The introduction of both on board computers and sealed parcel
vehicles has created a skills gap amongst drivers.




                                                                                      29
                                                                 Cogent Market Assessment


        At the moment, companies in the petroleum industry are experiencing a low number
        of job applicants. Furthermore, those who are applying lack the appropriate skills and
        qualifications.

        Two-thirds of all those employers who anticipated skills gaps reported that they are
        brought about, in part, by legislation and technological change.

        Polymer Sector

        The Skills Foresight Report for the Plastics Industry (2000-2001) has identified the
        most notable skills gaps as being in the areas of technical competence and
        communication. In addition, the survey highlighted plant and machine operatives and
        managers/supervisors as being the most likely categories of employee to be
        recognised as having a skills gap. Key technical skills shortages were identified as
        continuous improvement techniques, knowledge of polymer materials and health and
        safety.

        Similarly, the Skills Foresight for the Rubber Industry (2000) highlighted significant
        skills gaps for engineering craft, engineering technician, process technician and plant
        and machine operative categories. Communication was identified as a skills gap for
        professional, plant and machine operative and sales categories. Willingness to learn
        and change was highlighted as a skills gap for engineering craft, plant and machine
        operatives and administration categories. Key rubber industry technical skills gaps
        were identified as continuous improvement techniques, health and safety and
        process troubleshooting.

2.1.8   Generic skills needs

        A number of studies have highlighted the importance of generic skills and their
        increasing importance to employers. Generic skill needs reflect changes in work
        organisation and work practices, technological change and a general increase in the
        expectations of employees. Primarily, the following generic skills are required:

           Communication
           Team working and getting on with others, including being able to work in self-
            managed teams
           Problem solving and diagnosis, and at professional levels, greater abilities for
            forward thinking and „whole system‟ thinking
           Taking responsibility, showing initiative and becoming more involved
           Organisation and management (Ref 26)

        Cogent is currently engaged with the SSDA group focused on Management and
        Leadership, IT, Employability, and “Golden Threads”.

2.2     Skills supply and employer training

        Within the sector, there is not merely a requirement for an increase in new entrants,
        but for better quality recruits. Aspects of globalisation have increased the need for
        continuous improvement and cost cutting leading to changes in structure. Thus, at all
        levels there is a need for high calibre recruits with the right mix of technical and
        key/core skills.

        The sector uses frameworks such as Modern Apprenticeships as part of the initial
        training of new entrants. This helps address issues such as the image and
        attractiveness of the industry as well as addressing skill needs. Provision of suitably
        skilled people into the industry is essential. The following section outlines the state of
        provision of employer and publicly funded training.



                                                                                               30
                                                              Cogent Market Assessment



The sector traditionally recruits from both further and higher education for specialist
jobs at three different levels.

   Highly specialised research and technical staff for a wide range of pure applied
    scientific and engineering roles. These people are likely to have degrees, higher
    degrees and PhDs.
   Generalists, usually graduates, requiring a level of scientific/technical
    understanding and numeracy, that will allow the individuals concerned to operate
    effectively in a technology-based environment.
   Technicians with practical competence in the application of management of
    science and technology, especially for manufacturing. These people are likely to
    have HNCs / HNDs / Modern Apprenticeships. A typical MA will have the
    equivalent of 5 GCSEs at grade C or above, including maths and science. Many
    will have higher qualifications.
In addition, the sector also recruits graduates and technicians in other disciplines to
work in areas such as administration, accounting, marketing and Human Resources.

The NTOs‟ Skills Foresights and Workforce Development Plans show while numbers
of employees in the sectors continue to decline slightly overall, there is a continuing
need to recruit, train and develop employees at technician and associate professional
level as skill levels and needs are set to rise. This also means that the existing
workforce needs up-skilling to meet the demands of new technology and changing
work practices.

Vocational routes and learning frameworks such as Modern Apprenticeships,
Foundation Degrees and Graduate Apprenticeships, based on National Occupational
Standards, are key to producing appropriately developed people with the skills and
knowledge base that the industry needs, and have the ability to benefit mature
employees as well as those entering the workforce. They offer a chance to create
routes to higher level qualifications which compete on a level playing field with
traditional, academic routes.

There has been an upward trend in qualifications attainment of the workforce.

                             Employment by Highest Qualification

                 35
                 30
                 25
    percentage




                 20
                 15
                 10
                  5
                  0
                         0        <NVQ2       NVQ2         NVQ3     NVQ4     NVQ5

                  Chemicals etc 1995      Chemicals 2001      Fuel 1995    Fuel 2001

                                                                                 (Ref 32)

(Note that the statistics cover greater employment base than the Cogent footprint).




                                                                                       31
                                                         Cogent Market Assessment


Around 31% of 18 – 19 year olds now enter higher education as opposed to 15% in
1990. Therefore, there has been a shift from an elite system of higher education
provision, to a position where opportunities for higher education provision have
become more widely available and more extensively promoted.

This development has been mainly at the expense of technical and vocational routes
within further education. Declining provision has led to the closure of National and
Higher National courses which has had an effect on manufacturing industries.

Key groups in the workforce

Managers within the sector tend to be graduates, with professional qualifications. The
focus for Cogent is on the life-long learning agenda, maintaining managerial skills at
the leading edge.

Process supervisors and engineers are an important group, with a need for provision
of occupational standards as the focus for assured training and competence to
support passport schemes, offshore safety certificates, N/SVQs, HNC/Ds.

Technicians are seen as one of the main focuses of Cogent activity, in both
recruitment and retention. They form part of the career path for supervisors and
engineers.

Process operators form the largest group of employees in some of the Cogent
industries, and are also one of the groups showing a rapidly aging profile. As
technology impacts on processing skills, there is a need to ensure that process
operators are trained and retrained to maintain standards of competence in line with
the higher skills requirements. Cogent must maintain the currency of occupational
standards in a fast-moving environment.

Drivers and distribution staff, whilst not part of the Cogent footprint, are important to
the sector. The shortage of drivers is a major concern, as is the quality of training
delivery. These issues are being addressed in cooperation with Skills for Logistics,
the SSC for the freight logistics industry.

Retail activities tend to be carried out by staff who, in comparison to the rest of the
sector, are lower paid and also have a higher proportion of part-time working
arrangements. The introduction of basic training and occupational standards at
N/SVQ level 2 are seen to be essential in reducing staff turnover, and in ensuring
continued protection of health, safety, security and the environment. Any work in this
area will delivered in partnership with Skillsmart, the SSC for Retail.

Other support staff within the sector are served by standards and qualifications within
the remit of other current and prospective sector skills councils. However, they are
still integral to the businesses within the Cogent sector, therefore the role of Cogent
for this group is in the area of generic industry-based training and competence, such
as health, safety, security and environment, and in awareness of the products.

More than 90% of the businesses within the sector are SMEs and Cogent must rise to
the challenge in engaging and providing for their skills needs, at an acceptable cost.

In summary, the key groupings are: professional engineers and scientists,
technicians and process operators.

Areas of learning supply that need most to be enhanced in order to meet
employer’s needs

In Nuclear and radiological technology, employers tend to recruit generalist
engineers and scientists, with the specialist associated skills training being delivered
in-house. This has led to a low demand for specialist provision in higher education.



                                                                                      32
                                                        Cogent Market Assessment


Consequently, there are few opportunities for undergraduates to experience nuclear
technology. This may have an adverse effect on recruitment. Post-graduate
qualifications also pose potential problems for those choosing a nuclear discipline –
to receive Chartered status within a professional engineering institute; a Masters is
seen as the required standard. Without post-graduate education, this would be
beyond their reach. Formalisation of in-house provision may potentially address these
issues, for example by matching the in-house provision with a modularised external
provision.

Within the UK, there are a large number of well-established polymer training and
education providers. These include Polymer Training Ltd which has recently sought
approval to be recognised as a Centre of Vocational Excellence, Burton College,
Manchester Metropolitan University, Wiltshire College and Bell College. Furthermore,
Rapra Technology is an independent research, technology and information provider
that specialises in rubber and plastics.

However, significant gaps are present within certain aspects of polymer training
especially in the provision of Further Education. The number of institutions offering a
BTEC NC in Polymer Technology, the recognised polymer specific Further Education
qualification, has fallen substantially. This has associated negative implications for
the future of the Polymer Processing Advanced Modern Apprenticeship in England,
Wales and Northern Ireland, as this is the compulsory technical certificate element
within the apprenticeship.

Higher Education institutions offer a large number of short courses. These tend to
have a high theoretical content, which is not always beneficial to sector employees.

The majority of Higher Education (HE) opportunities are centred at the master‟s level,
creating a resulting gap for those who wish to specialise in polymers at HE level direct
from leaving school.

In terms of occupational standards, the sector has developed and maintained an
extensive framework (Appendix 2), and is constantly seeking to promote their use
within the industries. An occupational and functional map for the newly formed sector
would be the recognised starting point to seeking gaps in provision, bearing in mind
that some parts of Cogent never had representation by an NTO. The wider sector
recognises that the there is also overlap in some of the standards currently in use,
and would seek to rationalise, to minimise the number of units and thus aid
transferability between industries. Known gaps are in the areas of management,
vapour recovery, drilling operations at higher levels, process engineering
maintenance and engineering maintenance and emergency response roles across
the sector.

For Modern Apprenticeships, a review and update will be required for Polymer
Processing, both the FMA and the MA in Scotland. This work is already underway
and will be completed soon in the case of Scotland. Promotion of MA frameworks
throughout the sector will also be continued.

Appendix 3 shows a listing of current sectoral engagement with the skills agenda.

Signpost

At the present time, Cogent is unable to provide data regarding the distribution of
qualifications and training by age, and occupation. Therefore, future work would need
to be undertaken to gather, collate and disseminate this information.




                                                                                     33
                                                              Cogent Market Assessment




                  SECTION 3:               THE PROPOSITION

3.1   A vision for the sector

      The importance of the Cogent industries to the UK economy in terms of their direct
      contribution to the Exchequer, their importance for the global competitiveness of the
      UK economy and their contribution to other commercial sectors and the UK
      infrastructure is significant.

      Cogent‟s main aim is to co-ordinate and lead the drive to improve business
      performance through skills development. Cogent will build on its experience as a
      trailblazer, and will benefit from the fresh perspective brought by the polymer industry
      and nuclear and radiological technology employers.

      The new SSC will make a difference in many ways by:

      LEADING the SECTOR on strategic pan-industry issues:

         Providing accurate assessment of changing needs (e.g. globalisation,
          demographic trends, new technologies)
         Influencing Government through representation of employers‟ needs
         Providing decision-makers with quality Labour Market information
         Initiating pan-sector activities to attract new workforce into the industry
         Adapting government requirements to business needs
         Making a contribution to industry goals: sector wide business goals, due
          diligence, reputation, influence on government, information for decision-making

      ADVISING INDIVIDUAL EMPLOYEES by:

         Providing quality information on vocational learning at all levels – from Operator
          Trainee through to R&D scientists and the leaders of tomorrow
         Helping develop transferable skills
         Offering a wide range of qualifications and learning frameworks to support the
          development of occupational competence

      PARTNERING with INDIVIDUAL BUSINESSES to:

         Provide innovative solutions that meet specific business problems
         Respond appropriately to differences of size, technology and geography as they
          impact on skills issues
         Bring expertise into attracting people with the right skills, knowledge and
          attributes to sustain and develop business
         Providing value for money and customer satisfaction with solutions to skills issues
         Make sure that we are effective in the speed of delivery of services and quality of
          information
         Enable companies to meet their compliance: with requirements, with standards,
          with best practice, with targets
         Share successful practice around skills contribution to innovation, value, learning
          and development.




                                                                                           34
                                                                 Cogent Market Assessment


3.1.1   REDUCING SKILLS GAPS AND SKILLS SHORTAGES

        The SSC Research and Guidance Team will provide solid and robust data, which
        allows trends and patterns to be identified. This will then be translated into sound
        decision making about priorities and resource allocation. Additionally this team co-
        ordinates the all-important communication to stakeholders on current progress and
        future challenges. A rigorous business model, managed by the Business Support
        Team, will underpin all these activities.

        The initial focus of Cogent will be


        1.     Working to improve the image of the sector, attracting more, and better
        qualified entrants at all levels. This work will build on the successful
        programmes initiated or supported by the predecessor organisations.


        It is the aim of the “Industry Attractiveness and Careers Information, Advice and
        Guidance” programme to address these issues. It will address the needs of the
        identified target audience
         Schools; Colleges; Universities; Careers Advisors; Teachers; Parents; Job
             Changers
        and will make information available through a variety of channels
         Literature; Events; Presentations; Electronically

        For schools,
         “Whatever” magazine, currently issued throughout primary schools in North East
            Scotland, and “Paraffin Young” stage show
         The radio quiz for local schools, broadcast by NorthSound radio, covering North
            East Scotland, recorded in various sponsor companies offices. The plan is to
            expand this quiz to selected areas, where Cogent industries are clustered.
         Education day at industry events, such as Offshore Europe, to bring school pupils
            going into higher education into industry events.
         Talking Jobs is part of the Continuing Education Gateway, funded by local
            authorities and industry partners. It makes “job information and learning
            opportunity information available to schools, colleges, universities, employers,
            guidance          agencies          and         the       general          public”.
            (www.ceg.org.uk/talkingjobs/industry.htm)
         Participation in events such as the “Engineering Road Show” visiting schools
            and colleges in and around Lowestoft, Great Yarmouth and Norwich, “performing”
            to over 3,000 pupils aged 14-15 years, and SkillCity, which took place in
            Manchester in November 2002. The four-day event, organised by the Prince‟s
            Trust and UK Skills, showcased vocational skills from across UK industry. It
            attracted more than 80,000 visitors.
         Schools careers conventions, events for teachers and careers adviser‟s general
            promotional literature.

        For mature entrants, job changers and current employees, the Oilcareers career
        guidance portal provides information for people who want to work in the Oil and Gas
        business but have never done so before. It provides information for people who are
        currently employed in the business but want to get advice on how to improve or give
        more direction to their career. The Cogent Evolvonline™ learning portal enables
        individuals to access a world-class online learning library of sector-specific e-learning
        materials. (See Appendix 4).

        Cogent will work with many other organisations to achieve this aim, for example
        SEMTA and ECITB, who both have close association with science and technology
        based occupations.




                                                                                              35
                                                        Cogent Market Assessment



2.      Promotion of work-based routes, based on national occupational
standards and vocational qualifications, as valid alternatives to academic
routes into the sector.


The industries within Cogent have been very supportive of S/NVQs at lower levels,
but relatively few standards and qualifications have been developed at levels 4 and 5.
Cogent has already planned, based on employer feedback, to produce standards in
Drilling Operations at higher levels. Any other developments will be directed by the
completion of the occupational and functional mapping study. Work has also been
done in ascertaining the need for further development of foundation degrees in
England.


3.     Working with employers at an individual or local level, promoting
access to appropriate learning and skills programmes.


Cogent will continue to build on the previous work of Cogent and the former Polymer
NTO, expanding to give greater coverage in key areas and across the five industries.
Examples of work already underway include:

   Cogent, in partnership with ECITB, is undertaking a study to assess the skills
    shortages within the Process and Design Engineering Sector in the North West
    and establishing whether these gaps are addressed by the local education sector
    and training providers‟ network. The study will also seek to identify new training
    and skills development requirements and establish funding routes for both
    existing and new training programmes. Cogent and ECITB will work with seven
    process and design engineering companies and three oil/chemical companies
    based in the North West, and will focus on providing tangible, short-term solutions
    aimed at meeting the sector‟s immediate needs, including methods of attracting
    young trainees and graduates into the industry.
   Cogent has been invited by the DTI to join the Downstream Oil Industry Forum‟s
    Rural Taskforce, set up in January to address specific issues raised by the
    Forum. The Taskforce brings together representatives of trade associations,
    government organisations and Cogent. At the first meeting, Cogent undertook to
    work with the Petrol Retailers Association (PRA) and Garage Watch to review the
    rural filling station skill sets and consider the skills pressures caused by business
    survival and diversification.
   The issue of English fluency among the retail petroleum workforce was initially
    raised by Cogent in August 2002 with the publication of a Focus Paper
    highlighting the issue for a large proportion of employees who speak English as a
    second language employed in the forecourt retailing sector, where health and
    safety is extremely important for staff and customers. A workshop for the industry
    took place in October during which Cogent received a mandate to develop a
    national programme, with appropriate partners, by the end of 2003.
   Polymer NTO has recruited more than 50 member companies to its Employer
    learning Networks. Following the setting up of its successful network in
    Lincolnshire, Polymer NTO set up 5 new networks in various parts of the UK. As
    a result, in partnership with a range of industry stakeholders and public sector
    bodies, networks are now operational in Scotland, the North East, Hereford and
    Worcester and in both the East and West Midlands. In setting up networks, it was
    considered important to support the development of skills within the plastics,
    rubber and sign making sectors that would improve industry competitiveness.
    Network activities include the exchange of best practice relating to individual
    learning programmes and the organisation of site visits to member companies.
    In addition, workshops are organised for member companies relating to workforce
    development, as well as supporting companies wishing to commit to the Investors


                                                                                      36
                                                               Cogent Market Assessment


            in People Standard, N/SVQs and Modern Apprenticeships. Cogent is
            implementing a plan for sustainability of the Networks which includes an
            interactive website and the opportunity for member companies to take advantage
            of funding support from a variety of sources. The interactive website will reflect
            the needs of those companies which have joined the initiative. Each network has
            a partner, which is closely linked to the Polymer NTO. There are currently a total
            of 12 partners and stakeholders offering support to member companies.

3.1.2   Productivity and performance

        Cogent aspires to, in the medium term, work towards reducing the productivity gap
        between the UK industries and their competitors.

        This will be done by

           Comparing performance within the sector in the UK and sharing best practice
           Comparing performance with foreign counterparts and benchmarking
            performance of the sector in the UK.
           Seeking opportunities to work closely with other organisations with a similar
            agenda, such as DTI, the Chemicals Innovation and Growth Team.
           Working together with other SSCs, to share information and intelligence.

3.1.3   Skills opportunities for all

        We will monitor the age, gender and ethnicity profiles of the sector in comparison to
        the UK profiles particularly in areas which have already been highlighted as
        significantly different from the norm.

        We will continue to encourage diversity in line with both current and emerging
        legislation.
        We will adapt the training materials generated from the Broad Level Research Report
        on the Gender Imbalance in the Oil and Gas Industry in Scotland, and extend the
        learning to the other industries.

        We will promote flexible learning opportunities through Evolvonline, providing all
        employers including SMEs with access to cost-effective training and development
        solutions. (See Appendix 4).

3.1.4   Learning supply

        We will work to improve learning supply, through provision and promotion of

           Relevant national occupational standards and associated vocational
            qualifications, based on research of employer needs.
            o In the short term, Cogent plans to undertake an occupational and functional
                mapping of the sector, highlighting where there are gaps in provision, and
                also where there are opportunities for harmonisation of standards and
                qualifications.
            o In the short to medium term, in consultation with employers and other
                interested parties, develop new occupational standards where required.
            o On a continuing basis, monitor the uptake and completion rates of N/SVQs,
                to ensure their suitability for and relevance to sector needs.

           Existing Modern Apprenticeship frameworks, plus any new frameworks deemed
            necessary.
            o continue to support and promote the apprenticeship frameworks developed
                and formerly operated by Cogent and Polymer NTO.
            o continue to support and promote the Technician Training Programme,
                established by Cogent in partnership with ECITB, for the upstream oil and
                gas industry.


                                                                                           37
                                                              Cogent Market Assessment


          o   transfer the learning from this programme to other industries within Cogent,
              where an interest from employers has been established.

         Foundation degrees, as both an entry point to the sector and as part of the
          development framework for existing employees where there is an established
          employer demand.

         An e-Learning Portal, to meet the recognised learning and skills needs of the
          sector. (See Appendix 4).

      Extension of e-learning materials available to provide coverage for the whole sector
      will be undertaken.

      Cogent will also work, in conjunction with other appropriate bodies and agencies, to
      influence developments in training supply and standards for generic and shared skills
      issues, such as the Management and Leadership Group led by SSDA.

      Cogent will participate in advisory groups facilitated by the accrediting bodies for
      subjects and areas of direct relevance to the sector.

      In summary, Cogent will work to ensure the supply of suitably skilled
      employees in line with industry needs.

3.2   Employer engagement

      Cogent plans to extend the existing, successful, model of engaging with employers.
      The current Cogent team is regionally based, to enable it to form close working links
      with partners at a local level.

      DELIVERING SOLUTIONS FOR EMPLOYERS

      The new SSC will build on the capability that already exists in terms of coverage
      across England, Scotland, Wales and Northern Ireland. This regional network works
      directly with employers and their representatives. This responds to the diversity of
      employers‟ needs according to their size, location and the technologies employed.
      There is an understanding that there is not a “one size fits all solution” but that a
      primary task lies in properly understanding not only the problem but also the context
      and constraints that make up the reality of the operating environment.

      Cogent will work with employer groups and other stakeholders and will seek
      representative membership of newly formed groupings. Short-term working groups
      will be convened for project-based opportunities, such as the development/revision of
      occupational standards and qualification frameworks and mapping studies. These
      groups will be drawn from appropriate employers in the industry concerned.

3.3   Engaging partners

      UK-wide, Cogent will engage, and build on existing relationships with:

         Industry bodies such as the Chemicals Leadership Council, the upstream
          Industry Leadership Team, and other similar bodies from polymers, nuclear and
          downstream.

         DTI, on a UK-wide industry and regional basis.

         Professional bodies, institutions and trade associations relevant to the sector.

         Other SSCs, in particular those which share a common interest or boundary. As
          part of the work undertaken during the “trailblazer” contract, Cogent is completing
          an innovative project titled “Working in Partnership to Develop a Strategic Skills


                                                                                             38
                                                         Cogent Market Assessment


    Agenda”. The project aim is to develop partnership arrangements between SSCs
    and other sector bodies whose activities impact upon the Cogent sector. Success
    of the project will lead to:
    o   Agreed protocols in place between Cogent and other participant sector
        groups
    o   Publication of a case study, supported with recommended best practice
        examples.

Cogent will build on the already established working relationships with partners at
both national and regional level. The employer engagement team has primary
responsibility for engagement with RDAs and LSCs, and with other relevant locally
based bodies, such as Teesside Chemical Initiative, East of England Energy Group,
South Wales Oil Industry Learning (SWOIL), and Grangemouth Development Group.
Identified members of the Cogent team will also have responsibility for engaging UK-
wide bodies, such as the Chemicals Leadership Council.

In Scotland, the Scottish Executive and SSDA agreed and published a protocol,
requiring SSDA and SSCs to liaise closely with specific stakeholders in Scotland.

In order to address part of this, Cogent has joined with other Sector Skills Councils
and FutureSkillsScotland to form a Scottish Labour Market Information group. Other
stakeholders include the Scottish Qualifications Authority, SSDA, and the Scottish
Executive.

It is expected that a similar model will be put in place in Wales, allowing Cogent to
form close links to FutureSkillsWales and Education and Learning Wales (ELWa).

In the English Regions, the work carried out by the Cogent regional teams will
expand, to include bodies in the polymer industry currently linked to the Polymer NTO
network, and in nuclear and radiological technology.

In Northern Ireland, Cogent will work with the Department for Employment and
Learning, the Priority Skills Unit, UfI Northern Ireland and all other relevant partners,
to ensure that coverage adequate service is provided to employers in the Cogent
sector.

See Appendix 5 for a complete listing of current Cogent partnerships and interactions.




                                                                                      39
                                                       Cogent Market Assessment


                                                                          Appendix 1

SIC Codes included within the Cogent sector, either wholly or partially (Based on
SIC 2003 definitions)

11      Extraction of Crude Petroleum and Natural Gas; Service Activities
        Incidental to Oil and Gas Extraction Excluding Surveying
        11.10 Extraction of crude petroleum and natural gas
        11.20 Service activities incidental to oil and gas extraction excluding surveying

23      Manufacture of Coke, Refined Petroleum Products and Nuclear Fuel
        23.10 Manufacture of coke oven products
        23.20 Manufacture of refined petroleum products
        23.30 Processing of nuclear fuel
60      Land Transport; Transport Via Pipelines
        60.30 Transport via pipelines
63?     Supporting And Auxiliary Transport Activities; Activities Of Travel
        Agencies
        63.12 Storage and warehousing

24      Manufacture of Chemicals and Chemical Products
        Manufacture of basic chemicals
        24.11 Manufacture of industrial gases
        24.12 Manufacture of dyes and pigments
        24.13 Manufacture of other inorganic basic chemicals
        24.14 Manufacture of other organic basic chemicals
        24.15 Manufacture of fertilizers and nitrogen compounds
        24.16 Manufacture of plastics in primary forms
        24.17 Manufacture of synthetic rubber in primary forms
        Manufacture of pesticides and other agro-chemical products
        24.20 Manufacture of pesticides and other agro-chemical products
        Manufacture of paints, varnishes and similar coatings, printing ink and
        mastics
        24.30 Manufacture of paints, varnishes and similar coatings, printing ink and
        mastics
        Manufacture of pharmaceuticals, medicinal chemicals and botanical
        products
        24.41 Manufacture of basic pharmaceutical products
        24.42 Manufacture of pharmaceutical preparations
        Manufacture of soap and detergents, cleaning and polishing preparations,
        perfumes and toilet preparations
        24.51 Manufacture of soap and detergents, cleaning and polishing reparations
        24.52 Manufacture of perfumes and toilet preparations
        Manufacture of other chemical products
        24.61 Manufacture of explosives
        24.62 Manufacture of glues and gelatine
        24.63 Manufacture of essential oils
        24.64 Manufacture photographic chemical material
        24.65 Manufacture of prepared unrecorded media
        24.66 Manufacture of other chemical products not elsewhere classified
        Manufacture of man-made fibres
        24.70 Manufacture of man-made fibres
25      Manufacture of Rubber and Plastic Products
        Manufacture of rubber products
        25.11 Manufacture of rubber tyres and tubes
        25.12 Retreading and rebuilding of rubber tyres
        25.13 Manufacture of other rubber products
        Manufacture of plastic products
        25.21 Manufacture of plastic plates, sheets, tubes and profiles


                                                                                   40
                                                       Cogent Market Assessment


       25.22 Manufacture of plastic packing goods
       25.23 Manufacture of builders‟ ware of plastic
       25.24 Manufacture of other plastic products
       Sign Making (no defined code)
20     20.51 Manufacture of other products of wood
28     28.75 Manufacture of other fabricated metal products not elsewhere classified
45     45.25 Other construction work involving special trades
       45.34 Other building installation
74     74.40/ Planning, creation and placement of advertising activities
       2

Polymers form a crucial part of many other manufacturing operations, and, in some
cases, in-house polymer processing forms part of larger operations, as defined in the
following codes. There are also some specialist machinery manufacturers with direct
links to the industry:

17     17.54   Manufacture of other textiles not elsewhere classified
18     18.22   Manufacture of other outerwear
29     29.43   Manufacture of other machine tools not elsewhere classified
       29.56   Manufacture of other special purpose machinery not elsewhere
               classified
       29.71   Manufacture of electric domestic appliances
30     30.01   Manufacture of office machinery
       30.02   Manufacture of computers and other information processing
               equipment
       30.20   Manufacture of electricity distribution and control apparatus
31     31.50   Manufacture of lighting equipment and electric lamps
32     32.20   Manufacture of television and radio transmitters and apparatus for line
               telephony and line telegraphy
       32.30   Manufacture of television and radio receivers, sound or video
               recording or reproducing apparatus and associated goods
33     33.10   Manufacture of medical and surgical equipment and orthopaedic
               appliances
       33.40   Manufacture of optical instruments and photographic equipment
       33.50   Manufacture of watches and clocks
34     34.30   Manufacture of parts and accessories for motor vehicles and their
               engines
       35.11   Building and repairing of ships
       35.12   Building and repairing of pleasure and sporting boats
       35.50   Manufacture of other transport equipment not elsewhere classified
36     36.11   Manufacture of chairs and seats
       36.14   Manufacture of other furniture
       36.40   Manufacture of sports goods
       36.50   Manufacture of games and toys
       36.63   Other manufacturing not elsewhere classified


Sample footprint agreements are shown overleaf. Similar templates are being
prepared for all other footprint overlap areas.




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                                                              Cogent Market Assessment




      MANAGEMENT OF BOUNDARIES BETWEEN SECTOR SKILLS
                        COUNCILS


1.    Sector Skills Councils party to the agreement:

      a)      Cogent SSC Ltd
              Minerva House
              Bruntland Road
              Portlethen
              Aberdeen AB12 4QL

      b)      Skillfast-UK
              Kingswood House
              80 Richardshaw Lane
              Leeds
              West Yorkshire LS28 6BN


2.    SIC Codes expressing area of common boundary

      24.12: Manufacture of dyes and pigments
      24.70: Manufacture of man-made fibres


3.     Sector interest of SSCs

      a)      Cogent represents the skills base of the chemicals manufacturing industry.

      b)      Skillfast-UK represents the skills base of the apparel, footwear and textiles
              industry.


4.    Background

i.    Dyes and pigments are manufactured for use in several industries, such as paper,
      textiles and polymers. Some employers manufacture for all end users, whereas
      others are highly specialized. For this reason, some of the manufacturers have a
      natural link to the textiles industry in terms of innovation and future planning.

ii.   Manufacture of man-made fibres, whilst being a chemical process, is closely related
      to the manufacture of textiles. The processes involved may be a hybrid of skills from
      chemicals manufacture and textiles manufacture.




                                                                                              42
                                                                    Cogent Market Assessment


5.        Agreement

          The parties noted at section 1

      Agree that the lead SSC for developments concerning occupational standards for
       chemicals manufacture will be Cogent SSC Ltd.
      Agree that developments concerning occupational standards for dye and pigment
       manufacture will lie with Cogent, but that because of the significant sectoral interest of
       Skillfast-UK, the drivers for development and standards for manufacture of textiles
       dyes and pigments, and the management of the process, may come from Skillfast
       UK. Cogent will assist in any such developments, to ensure that duplication of
       materials is avoided. Skillfast-UK will, if the occasion arises, assist Cogent in any
       general standards development in this area, to ensure maximum inclusivity.
      Agree that developments concerning occupational standards for man-made fibres will
       lie with Skillfast-UK, and that Cogent will make available to Skillfast-UK any standards
       and related information to assist in this process.
      Agree that, at a strategic level, the interests of dye and pigment manufacturers will be
       represented via Cogent and in the case of man-made fibres; Skillfast-UK will act at a
       strategic level.
      Agree that consultation on skills issues pertaining to these occupational areas will be
       communicated by each SSC to the other party at the first opportunity.



Appended signature and date from all parties.


On behalf of Cogent SSC Ltd                                On behalf of Skillfast-UK

(Sign)                                                     (Sign)

(Print)                                                    (Print) Linda Florance

Date                                                       Date




                                                                                              43
                                                                  Cogent Market Assessment




       MANAGEMENT OF BOUNDARIES BETWEEN SECTOR SKILLS
                         COUNCILS


1.      Sector Skills Councils party to the agreement:

        a)      Cogent SSC Ltd
                Minerva House
                Bruntland Road
                Portlethen
                Aberdeen AB12 4QL

        b)      Skillsmart
                 nd
                2 Floor
                21 Dartmouth
                London SW1H 9BP

2.      SIC Codes expressing area of common boundary

        50.50 Retail sale of automotive fuel


3.      Sector interest of SSCs

        a)      Cogent represents the skills base of the oil & gas extraction, nuclear and
                radiological technology, chemicals manufacturing, petroleum and polymer
                industries.

        c)      Skillsmart represents the skills base of the retail industry.


4.      Background

The sale of fuel on forecourts is carried out by three different types of employees, with a core
skills requirement focused on the health and safety issues related to receiving delivery of and
overseeing the sale of fuel. The working environments can differ, for example,
      self-service, fuel only outlet
      self-service, fuel plus retail outlet
      self-service, retail plus fuel outlet (such as a supermarket)
      vehicle service and maintenance premises, with self-service fuel outlet
      attended outlet.

In each of these, the core function of responsibility for safe handling of automotive fuel
remains the same, as do the extensive health and safety requirements .

The occupational standards currently in use, “Forecourt Operations”, are maintained by
Cogent SSC, and contain units imported from the retail suite of qualifications maintained by
Skillsmart SSC.




                                                                                             44
                                                                 Cogent Market Assessment


5.        Agreement

          The parties noted at section 1

      Agree that the lead SSC for developments concerning occupational standards for the
       safe handing of automotive fuel will be Cogent SSC.
      Agree that the lead SSC for developments concerning occupational standards for
       retail activities associated with automotive fuel will continue to be Skillsmart.
      Agree to co-operate in any future developments regarding skills issues associated
       with the retail sale of automotive fuel. Cogent SSC will take the lead at a strategic
       level.
      Agree that consultation on skills issues pertaining to this occupational role will be
       communicated by each SSC to the other two parties at the first opportunity.




Appended signature and date from all parties.


On behalf of Cogent SSC Ltd                             On behalf of Skillsmart

(Sign)                                                  (Sign)

(Print)                                                 (Print) Beverley Paddey

Date                                                    Date 20 October 2003




                                                                                         45
                                                                      Cogent Market Assessment


                                                                                              Appendix 2

National Occupational Standards currently controlled within the Cogent footprint are
shown in the table below, with an additional column showing the area of application of
the associated qualifications.

 NATIONAL OCCUPATIONAL STANDARDS                                         N/SVQ Levels             Area
 Process Engineering Maintenance                      2, 3              CM
 Process Manufacture: Chemicals                       2, 3              CM
 Process Operations: Chemical & Pharmaceutical        1, 2, 3           CM
 Process Operations: Technical Support – Chemical & 3                   CM
 Pharmaceutical
 Packaging Operations                                 1, 2              CM
 Engineering Maintenance                              2, 3              OG
 Safety Services: Oil and Gas Extraction              2, 3              OG
 Offshore Crane Operations                            2                 OG
 Offshore Deck Operations                             2                 OG
 Processing Operations: Hydrocarbons                  1, 2, 3           OG
 Process Operations: Hydrocarbons (Control Room)      3                 OG
 Well Services: Electric Logging (Open Hole Services) 2, 3              OG
 Well Services: Electric Logging (Cased Hole          2, 3              OG
 Services)
 Well Services: Mechanical Wireline                   2                 OG
 Well Services: Tubing Operations                     2                 OG
 Offshore Drilling Operations                         1, 2, 3           OG
 Meter Proving                                        3                 P,OG
 Metering Maintenance                                 3                 P,OG
 Bulk Liquid Warehousing                              2                 P
 Lubricants Plant Operation                           2                 P
 Forecourt Operations                                 2                 P
 Oil-fired Technical Services                         2, 3              P
 Refinery Field Operations                            3                 P
 Refinery Control Room Operations                     3                 P
 Emergency Response Standards - offshore              -                 OG
 occupations
 Polymer Processing and Related Operations*           1, 2, 3           Poly*
 Signmaking                                           2, 3              Poly
CM = Chemicals manufacturing, OG = Oil & Gas, P = Petroleum, Poly = Polymers

*this qualification covers a wide variety of manufacturing activities within the polymer industry, namely:
Assemble Products                          Blow Moulding                              Blown Film
Compression Moulding                       Continuous Substrate Coating               Decorating Flexographic
Decorating Offset on Rigid Plastics        Decorating by Screen Printing              Film Conversion
Expanded Polystyrene Moulding              Direct Screw Transfer Moulding of Thermosets
Extrusion Profile and Sheet                Finish Products (Plastics. GRG or Tyre Manufacture)
FRP (GRP) Laminating Hand Wet Lay Up FRP (GRP) Laminating Pre-impregnated Hand Lay Up
General Rubber Good : Assembly             General Rubber Good : Preforming
General Rubber Good : Vulcanising          General Rubber Good : Weighing and Mixing
Hand based Processing / Fabrication        Handle and Pack                            Injection Moulding
Monitor and Assemble Goods                 Material Preparation
Material/Product Handling
Monitor and Pack Manufactured Goods Machine Based Processing (non listed processing)
Mount Moulds/Dies to Procedures            Pack, Store & Maintain Stock               Polymer Compounding
Prepare, Mix, Pack and Store Materials Rotational Moulding                            Recycle Waste Products
Tyre Manufacture : Components/Parts Thermoforming                                     Retread Tyres
Tyre Manufacture : Assembly                Sampling and Testing Materials/Products
Tyre Manufacture : Compounding             Tyre Manufacture : Vulcanising




                                                                                                          46
                                                               Cogent Market Assessment


                                                                               Appendix 3
Sectoral engagement with skills agenda

The “sector” as such does not currently exist in terms of an agenda – each component
industry is currently working separately.

Upstream Oil & Gas

PILOT takes a strategic view of the oil & gas industry and focuses on areas, which
fundamentally influence the sustainability of the UKCS.

The PILOT concept aims to unite the senior management of operators, contractors, suppliers,
unions and relevant Government Departments, thereby working to address the need to
reduce the cost base of activity in the UKCS. It also wishes "to create a climate for the UKCS
to retain its position as a pre-eminent active centre of oil and gas exploration and
development and production and to keep the UK contracting and supplies industry at the
leading edge in terms of overall competitiveness"

The Industry Leadership Team (ILT) consists of twenty-two representatives from operators,
contractors, suppliers and trade unions. PILOT receives regular feedback from the frequent
ILT meetings.

Cogent works closely with the Industry Leadership Team, to provide information and execute
actions related to skills.

The Department for Trade and Industry has an Oil and Gas Directorate, part of the DTI
Energy Group, providing information on licensing, decommissioning, infrastructure and
statistical analysis of the industry and surveys of future industry activity.

Local initiatives currently underway include a project funded by the NorthWest Development
Agency to establish skills initiatives for the Oil and Gas Process and design Engineering
Contractors and a project funded by Envirolink to determine skills shortages in the Energy
and associated industries based in the Northwest.

Nuclear

The Nuclear Industry Association is the trade association of the UK nuclear industry. It
represents over 80 companies involved in the industry. This includes the operators of the
nuclear power stations; those engaged in decommissioning, waste management and all
aspects of the nuclear fuel cycle; nuclear equipment suppliers; engineering and construction
firms; nuclear research organisations; and legal, financial and consultancy companies.

The objectives of the NIA include the promotion of the commercial performance of the UK
nuclear industry by assisting and supporting member companies to develop their businesses
in the UK and internationally.

The DTI Energy Group provides a source of general background information about the civil
nuclear industry in the UK, such as the regulatory framework, and the issues for which DTI is
responsible, in its role as an industry owner and supervisor, its regulatory activities and
aspects of international safety and technical assistance to the former Soviet Union and
Eastern European countries.

Local Initiatives include collaboration between Cogent and DTI to organise a workshop and
seminar on National Occupational Standards for nuclear employers.




                                                                                           47
                                                                 Cogent Market Assessment


Petroleum

There are several employer groups involved in skills initiatives and skills strategies, including
arrange of trade associations and regional groupings. These include:

UKPIA: UK Petroleum Industry Association
AUKOI: Association of UK Oil Independents
TSA: Tank Storage Association
FPS: Federation of Petroleum Suppliers
PRA: Petrol Retailers Association
Garage Watch (Retail)
BLF: British Lubricants Federation
OFTEC: Oil Fired Technical Association
BBA: British Bitumen Association
NIOF: Northern Ireland Oil Federation
NIODA: Northern Ireland Oil Distributors Association
PEIM: Petroleum Equipment Installers and Manufacturers
LPGA: Liquid Petroleum Gas Association

Many of these Associations have specific committees established to focus on skills issues.

Other initiatives include SWOIL (South Wales Oil Industry Learning). This group comprises
two refineries, a chemicals company, an oil storage company, two local colleges and a
various technical contractors based in West Wales.

The DTI Energy Group also provides information regarding downstream industry.

Polymers and Chemicals Manufacturing

Trade Associations for the industries include:

British Adhesive & Sealants Association
British Aerosol Manufacturers Association
British Association for Chemical Specialities
British Chemical Distributors & Trades Association
British Chemical Engineering Contractors Association
British Coatings Federation Ltd
British Colour Manufacturers‟ Association
British Compressed Gases Association
British Fragrance/Essence Manufacturers‟ Association
British Imaging & Photographic Association
British Plastics Federation
British Polyolefin Textiles Association
British Pyrotechnists Association
Chemical Industries Association
Composites Processing Association
Chemical Recycling
(The) Cosmetic Toiletry & Perfumery Association Ltd
Dyestuffs Sector Group
National Sulphuric Acid Association Ltd (affiliated to the CIA)
UK Cleaning Products Industry Association
The Society of Chemical Industry
Society of Dyers & Colourists
Solvent Industry Association (affiliated to the CIA)
Specialised Organic Chemicals Sector Association (part of CIA)
British Rubber Manufacturers Association

There are a number of skills initiatives for chemicals manufacturing and the polymer industry,
mostly operating at a local or regional level. These include:



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                                                                Cogent Market Assessment


Initiative                                              Owner
Centre of Manufacturing Excellence and                  NWDA/industry/NW Universities
National Manufacturing Advisory Service
Centre of Excellence: Training                          Scottish Enterprise/
                                                        Forth Valley Enterprise
Centre for Organic Materials                            NWCI/NW Universities
PICME Process Industries Centre for Manufacturing       CIA
Excellence
Manchester Materials Science Centre                     University of Manchester and UMIST
NICHE – National Innovation Centre for High Added       CIA/SOCSA (feasibility study)
Value Chemicals
Polymer Centre at Manchester Metropolitan               NWDA/MMU
University
Regional Centre of Manufacturing Excellence             CIRCLE, Yorkshire Enterprise
Wilton Centre of Excellence for Polymer                 EPICC/One NorthEast
Technology
Entrepreneur programme for Chemists                     CIRCLE
Foundation degree Chemical Technology                   TCI/NE Universities
Universities at the Heart of Process Industry Cluster   Teesside Chemical Initiative/EPICC
Skill requirement and demographics of key roles in      NWCI/NW industry
NW Chemical Industry
Cluster study for Pharma and Specialities               One NE
Cluster study to look at science base                   Yorkshire Forward
Science Base study                                      TCI/One NE
Training on Industrial Catalysis processes              Industry (Faraday)
Manufacturing Round Table                               EPICC
R&D Management Round Table                              EPICC
Suppliers Round Table                                   EPICC (TCI Manufacturing Challenge)
Chemical Cluster Study                                  Yorkshire Forward
Establishment of Regional Resources Centres for         East Midlands Polymer Executive
polymer, sign manufacture, and composites               Forum with Polymer NTO
Implementation of action plan emerging from Skills      Scottish    Plastics and     Rubber
Survey conducted in 2002                                Association Executive Forum with
                                                        Polymer NTO
Conduct a skills survey and develop action plans for    North East Polymer Executive Forum
polymer sector                                          with Polymer NTO
Conduct a skills survey and develop action plan for     West Midlands Polymer Executive
polymer sector                                          Forum with Polymer NTO
Extension of the “on-line” learning programme           Polymer NTO
across Wales

Other regional groups engaged in the skills agenda include

The Polymers Employers Forum East Midlands
                                    North East
                                    Northern Ireland
                                    Scotland
                                    South West
                                    West Midlands

The Chemicals ITO Network, comprising local employer groups from chemicals, refining,
pharmaceuticals and associated companies, facilitated by Cogent.




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                                                   Cogent Market Assessment


                                                                    Appendix 4



                has been developed by Cogent to meet the recognised
learning and skills needs of our sector. It is the only sector-specific online
learning service delivering e-learning and skills development advice to the
sector around the world.

Evolvonline™ adds a new dimension to traditional learning and development.
It enables individuals and companies of any size to access a world-class
online learning library of e-learning materials from quality assured publishers
and training providers via a safe, secure and user friendly web-based learning
management system. Evolvonline™ delivers a cost-effective, low risk solution
to the provision of e-learning.

Evolvonline™

   Provides industry-informed advice and guidance on learning and skills
    development
   Provides access to specialist learning and educational materials
   Provides a range of courses from basic skills to specific technical training
   Securely records personal learning and educational achievements for
    later use
   Links learning and educational resources to occupational qualifications
    and Cogent accreditation
   Provides a single, cost effective training resource for individuals, SMEs
    and corporations in the oil and gas extraction, chemicals manufacturing
    and petroleum industries.




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                                                           Cogent Market Assessment


                                                                          APPENDIX 5

WORKING IN PARTNERSHIP WITH STAKEHOLDERS AND PARTNERS IN
GOVERNMENT DEPARTMENTS, DEVOLVED ADMINISTRATIONS AND
REGIONS.


Given the UK-wide spread of the Cogent industries, it is essential to work in
partnership with key stakeholders in all the countries and regions of the UK including
those areas where the industries have not been defined as priorities.

Cogent‟s intent is to be the main point of reference for skills issues in the sector, in
any country or region. This will be achieved through:

      The expertise and experience of the staff who will work in all areas of the UK
      The organisational design of the company which will provide the internal
       capability and external networks to extend reach and influence
      The establishment of employer forums/networks in each country/region to
       provide a responsive and coherent employer voice on industry issues
      The provision of intelligence to inform policy and planning in the
       country/region
      Employer led workforce development planning
      The provision of information and expertise on occupational standards and
       qualifications relevant to the industries
      The promotion of careers and qualifications in the industry through the
       development of Modern Apprenticeship and Graduate Apprenticeship
       Frameworks and foundation degrees
      Products and services tailored to meet the needs of companies both large
       and small to include vocational qualifications and learning packages
      Support for the development of Centres of Vocational Excellence
      Support for schools, colleges and institutions of higher education wishing to
       develop their vocational curricula and work experience provision.

Cogent has already sought close working relationships with a wide variety of partner
organisations, and has built up a considerable network.

The extent of current partnership working and engagement is shown in the first two
following tables, at national level (where the partner organisation has a UK-wide
remit) and at a regional level (where the partner organisation has a remit within an
English region or within a devolved administration).

These lists are not exhaustive, but give an indication of the main areas of current
activity.

The third listing shows a range of achievements as a result of these, and similar,
partnerships.




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                                                        Cogent Market Assessment


1.     NATIONAL

ORGANISATION                       COGENT ENGAGEMENT
Department for Trade & Industry    Cogent has an established working relationship
                                   with DTI in several areas, as a member of
                                   initiatives and as a development partner.
                                   Member – Downstream Oil Forum (DOIF)
                                   Member – DOIF Rural Taskforce
                                   Collaboration to organise workshop and seminar
                                   on National Occupational Standards for nuclear
                                   employers.
                                   Regular meetings with national and regional DTI
                                   representatives from DTI Energy Group, joint
                                   initiative working.
Petrol Retail National Safety      Member. This group influences the content of the
Group                              “safety passport” scheme for petrol retailers the
                                   IOSH SPA Safety Passport (Petrol Retail)
Energy Saving Trust (EST)          Cogent is a member of the SSC Group of the
                                   EST, which was set up by the UK Government in
                                   1992. Its goal is to achieve the sustainable and
                                   efficient use of energy, to cut the carbon dioxide
                                   emissions which are the key contributor to global
                                   warming.

                                   Working with a range of partners, EST focuses
                                   on delivering practical solutions for households,
                                   small firms and the road transport sector.
Stabilising, Refining and          Employer Group
Manufacturing Sub Management
                                   Group Facilitator also for the SR&M Competency
Group (SR&M)
                                   and Safety Passport Working Group
Storage, Blending & Distribution   Employer Group. Cogent is a member, assisting
Management Group                   employers in addressing skills issues.
Petrol Retailers Association       Trade Association. Cogent is invited to attend the
                                   regular meetings of the Association, to discuss
                                   skills issues of member companies.
Oil Fired Technical Association    Trade Association. Cogent is a member of the
                                   Training and Registrations Group, and has
                                   developed occupational standards for employees
United Kingdom Petroleum           Trade Association, consisting of representation
Industry Association               from all refineries.
                                   Attendee - Retail Policy Working Group
                                   Attendee - Refinery/HR Managers Group
                                   Attendee – Transport Committee
Tank Storage Association           Trade Association. Cogent is invited to attend the
                                   regular meetings of the Association, to discuss
                                   skills issues of member companies.


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                                                        Cogent Market Assessment



Downstream Training Providers      Member
Network
Fuels Retail Advisory Group        Member
British Lubricants Association     Trade Association. Cogent is invited to attend the
                                   regular meetings of the Association, to discuss
                                   skills issues of member companies.
Petroleum Equipment Installers     Trade Association. Cogent has recently been
and Manufacturers                  invited to attend meetings of this group.
Federation of Petroleum            Trade Associations
Suppliers
                                   Regular contact is maintained. Cogent is often
Petrol Retailers Association       invited to attend meetings to Cogent is invited to
                                   attend the regular meetings of the Associations,
Garage Watch (Retail)
                                   to discuss skills issues of member companies.
United Kingdom Offshore            Trade Association
Operators Association
                                   Attendee - Employment & Practices Committee
                                   Attendee - Operations & Technical Committee
                                   Provide guidance on career development for
                                   school leavers through to graduate level
Well Services Contractors          Trade Association
Association
                                   Host and member - Training & Competence
                                   Group
                                   Cogent provides LMI via sub-sector surveys.
                                   Cogent provides occupational standards for
                                   particular niche disciplines.
International Association of       Trade Association
Drilling Contractors
                                   Member - Training Working Party
                                   Cogent provides LMI via sub-sector surveys.
                                   Cogent provides occupational standards for
                                   particular niche disciplines.
International Marine Contractors   Trade Association. Cogent attends the COGS
Association                        group, responsible for careers and industry
                                   attractiveness programmes.
Society of Underwater              Trade Association. Cogent attends the COGS
Technology                         group, responsible for careers and industry
                                   attractiveness programmes.
Training Providers Advisory        This employer group was developed in the UK by
Group                              Cogent, and has now achieved international
                                   recognition in the upstream oil and gas industry.
                                   The International group and upstream group is
                                   hosted by Cogent.
Investors in People                Cogent was re-recognised in January 2001 as
                                   continuing to meet the Investors in People
                                   standard.



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                                                         Cogent Market Assessment



Offshore Contractors Association   Trade Association.
                                   Cogent invites OCA to contribute to the
                                   technician review process, to ensure whole
                                   industry coverage.
Institute of Petroleum             Cogent attends the COGS group, responsible for
                                   careers and industry attractiveness programmes.
Chemicals Leadership Council       CLC was established as a direct result of the
                                   DTI-sponsored Chemicals Innovation and Growth
                                   Team, looking at the long-term strategy for the
                                   chemicals industry in the UK.
                                   Cogent is a member of the Skills and
                                   Competences Strategy Group, and maintains
                                   regular contact with the CLC.
British Association of Open        Cogent is a member of BAOL, and offers the
Learning                           industry access to Petroleum Open Learning.
SSDA                               Cogent plays a full part in the Skills for Business
                                   Network facilitated by SSDA, and attends
                                   (wherever possible) the following:
                                   Member - Intelligence Network
                                   Member - Policy Network
                                   Member - CEO Network
                                   Member – Communications Network
                                   Member – “Golden Threads” Network
                                   Member - Technical Forum
OSCEng NTO Group                   Member of the “NTO” group, ensuring suitability
                                   of generic engineering standards within the
                                   Cogent footprint.
Technician Steering Group          Cogent works in partnership with UKOOA, OCA,
                                   DTI and ECITB, to ensure that the upstream Oil
                                   and Gas Industry is offered coherent, whole-
                                   industry training programmes for technicians.
                                   This group is co-ordinated by Cogent.
PILOT                              PILOT takes a strategic view of the oil & gas
                                   industry and focuses on areas, which
                                   fundamentally influence the sustainability of the
                                   UKCS. Cogent is associated with a range of
                                   these through the ILT.
ILT – Industry Leadership Team     The principal industry working group, consisting
                                   of all major employers in upstream oil and gas
                                   industry at Chief Executive level.
                                   Cogent plays a key role in this group, as the focal
                                   point for all skills issues.
Trade Partners UK (renamed         Partnership on development of TrainUK website.
UK Trade & Investment in Nov
2003)



                                                                                   54
                                                       Cogent Market Assessment



JobCentrePlus                    Work closely with, in area of careers in oil & gas.
Health & Safety Executive        Cogent has close involvement with HSE,
                                 especially in the area of health and safety for
                                 offshore working.
Nuclear Employers Steering       Member of recently established employer group,
Group                            looking at skills needs in the nuclear industry.
Nuclear Skills Project           Member of recently established employer group,
Management Group                 looking at skills needs in the nuclear industry.
Nuclear Engineering Society      Employer Group.
                                 Cogent has been invited to present a Skills paper
                                 at the December Forum.
Chemical    Industry   Training The CITO network consists of regional groups of
Organisations:   North    East, employers, mainly but not exclusively in the
Humberside, Teesside, Scotland chemicals industry. These groups have been in
                                place for many years.
                                 Cogent is a member of all regional groups, and is
                                 involved in various Initiatives. Cogent is in the
                                 process of setting up groups where they do not
                                 currently exist.
                                 Cogent is helping to development of links
                                 between the CITO network and the Chemical
                                 Growth & Innovation Team‟s Skills Group.

2.     REGIONAL

The North East based members of the EET have built close working
relationships with a range of employer and government partners, as active
members of
North East Energy Cluster        Cluster Member, Skills Action Group Forum
                                 Member
                                 Skills Action Group Member
North East Pharmaceutical     & About to become Cluster Member
Specialities Cluster
                                 Careers Action Plan Group Member
North East Chemical Cluster      High Level Engagement and about to jointly lead
                                 Regional Skills Development Unit
                                 Joint Working Protocol with P&S and Chemicals
                                 Clusters nearing agreement
ONE RDA                          Cogent is a member of the FRESA Board, and is
                                 involved in a range of skills initiatives.
North East Learning and Skills EET members meet regularly with the four LSC
Council                        Learning & Development staff to progress Sector
                               Plans
                                 Tees Valley Strategic Area Review (StAR) SSC
                                 representation involvement



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                                                        Cogent Market Assessment



DTI Oil and Gas Team               Members of Regional Integration Group (NE
                                   England)
Northern Offshore Federation       The NOF is a Trade Association representing
                                   member companies in the North of England
                                   involved in the offshore oil and gas sector and
                                   associated energy-related industries. The NOF
                                   provides Business Support for its member
                                   companies operating mainly in the Marine Oil &
                                   Gas and Renewable Energy Sectors.
                                   Cogent is a member of the Training Advisory
                                   Group of NOF, offering guidance and support.
                                   This group collaborates on input at a regional
                                   level to groups such as the North East Chemical
                                   Cluster.
Yorkshire & Humber LSCs            Cogent acts with Humber Chemicals Focus as
                                   Joint Brokers For Chemicals Issues in the LSC
                                   areas.
European Process Industries EPICC is an industry led centre of excellence set
Competitiveness Centre      up to improve manufacturing performance in the
                            process industries through the successful
                            exploitation of knowledge and expertise within
                            industry and academe. Primary customers are
                            the chemical, pharmaceutical, food & drink,
                            materials and utilities industries.
                                   Cogent is a member of the Business
                                   improvement Through People (BITP) Forum.
North East Regional Assembly       Skills & Training Panel Contributors.
Chartered Institute of Personnel NE Executive         Involvement     (via   personal
& Development                    membership).
                                   Active CIPD membership is held by several staff.
The EET members in the North West, South West and Wales
SWOIL - South        Wales     Oil Member: this group comprises two refineries, a
Industry Learning                  chemicals company, an oil storage company,
                                   two local colleges and a various technical
                                   contractors based in West Wales. Cogent has
                                   developed     a   partnership  approach     to
                                   undertaking careers promotion activity in the
                                   region.
ELWa                               Cogent is a member of the SSC Network group,
                                   attending regular meetings to share information
                                   on SSC current and planned activities in Wales,
                                   and best practice. The group aims to focus on
                                   an influencing policy role by developing priorities
                                   identified in the Skills and Employment Action
                                   Plan 2 (under development).
                                   Cogent has received project funding to establish
                                   the provision of Local Modern Apprenticeships in
                                   North Wales.


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                                                           Cogent Market Assessment



Future Skills Wales Skills / ELWa   Cogent is a member of this group, attending
Labour Market Information           regular meetings to share best practice and to
Network                             harmonise, where appropriate, research collation
                                    and reporting methodologies. Submitted input to
                                    the recent Sectoral Assessment process for
                                    ELWa.
Enviroskills                        On Steering Group - funded by SWRDA, its brief
                                    is to address skills development in the
                                    Environmental Technology sector.
Northwest CBI Conference            Presented a paper on Skills challenges in the
                                    North West
North West regions Chemicals        Member
Cluster Alliance
Northwest SSC Forum                 Member
Cheshire and Warrington LSC         Member
Alliance for Skills Project Group
North West SBS/LSC Project          Member
management Group
NWDA                                Project funded to establish skills initiatives for the
                                    Oil and Gas Process and design Engineering
                                    Contractors
Envirolink                          Project funded to determine skills shortages in
                                    the Energy and associated industries based in
                                    the Northwest
EET Members in East and South
CATCH Competency                    On Buildings,      Finance     and   Training    Sub
Assessment & Training Centre        Committees
Humberside
East of England Energy Group        Cogent has developed a close working
                                    relationship with EEGR through partnership on
                                    projects such as “Skillneeds” and TrainUK, and
                                    is presenting a paper on Future Skills in the
                                    Cogent sector at EEGR conference in November
Education Business Link with        Member
Business (Grimsby)
Lincolnshire Learning & Skills      Basic Skills Group; Polymers Group
Council
Basic Skills Working Group –        Member
Petrol Retail
The London Sector Skills Forum      Member
DfES                                Member – ETP Stakeholder Group
EET for Scotland and Northern Ireland
Scottish Qualifications Authority   Member, advising on qualifications at all levels,
Process Advisory Group              including further education and vocational
                                    education.


                                                                                       57
                                                       Cogent Market Assessment



Scottish Executive               Cogent has established communication links
                                 with various Scottish Executive departments,
                                 such as FutureSkills Scotland and Enterprise
                                 and Lifelong Learning Department.
                                 It is planned to build on these initial links to
                                 explore, amongst other things, implementation of
                                 Business Learning Accounts. Regular meetings
                                 have already been held to establish the
                                 framework.
Highlands & Islands Enterprise   Regular meetings are held. Subjects under
                                 review include
                                      the association of H & I with oil and gas
                                        industry
                                       Decommissioning of Dounreay nuclear
                                        facility.
                                       Introduction   of   rural   filling   stations
                                        initiative.
Scottish Enterprise              Regular meetings are held. Subjects under
                                 review include
                                      Introduction of rural filling stations
                                        initiative.
                                       Modern Apprenticeship programmes.
Scottish Enterprise Grampian     Regular meetings are held. Subjects under
                                 review include
                                      Manpower reviews for Upstream Oil &
                                        Gas
Scottish Health at Work Scheme   Member – currently hold Bronze Award, working
                                 towards Silver. Aims to maintain and improve the
                                 health of employees through a range of
                                 initiatives
NIOF Northern Ireland Oil        Have met with and discussed skills issues
Federation                       regarding forecourts and especially storage and
                                 distribution, given the differences between the
NIODA Northern Ireland Oil
                                 supply chain in Northern Ireland, and that of the
Distributors Association
                                 mainland UK.
Future Skills Scotland/SSAScot   Cogent is a member, attending regular meetings
Labour Market Information and    to share best practice and to harmonise, where
Intelligence Group               appropriate, research collation and reporting
                                 methodologies.
                                 Specific activities from this group include:
                                 working together to produce sectoral reports
                                 based upon FSS research of 2002 and inputting
                                 to the searchable database for research
                                 material. The SLMG are in the process of
                                 finalising their future work plan which includes
                                 approaching the Scottish Executive to join the
                                 group to ensure the link to evidence based
                                 policy.



                                                                                   58
                                                         Cogent Market Assessment



Scottish Council for Development     Member of the Council -The Scottish Council for
and Industry                         Development and Industry is an independent
                                     membership    network    which     strengthens
                                     Scotland's competitiveness by influencing
                                     Government policies to encourage sustainable
                                     economic prosperity.


Polymer Team
(will form part of the new Cogent)
Polymer Executive Forum: East        Cogent (currently Polymer NTO) is member and
Midlands                             facilitator of the forum, which is chaired by a
                                     leading employer. The group comprises senior
                                     employers and senior staff from East Midlands
                                     Development Agency, and LSC Lincolnshire &
                                     Rutland.
Polymer Executive Forum: West        Cogent (currently Polymer NTO) is member and
Midlands                             facilitator of the forum, which is chaired by a
                                     leading employer. The group comprises senior
                                     employers and senior staff from Advantage West
                                     Midlands and LSCs)
Polymer Executive Forum: North       Cogent (currently Polymer NTO) is member and
East                                 facilitator of the forum, which is chaired by a
                                     leading employer. The group comprises senior
                                     employers and senior staff from One North East
                                     and LSCs.
Polymer Executive Forum:             Cogent (currently Polymer NTO) is member and
Scotland                             facilitator of the forum, which is chaired by a
                                     leading employer. The group comprises senior
                                     employers and senior staff from the Scottish
                                     Enterprise, members of the Scottish Plastics &
                                     Rubber Association [a representative body,
                                     chaired by a senior employer] and Universities.
Northern Ireland Polymers            Cogent (formerly Polymer NTO) has worked with
Association (NIPA)                   the Training & Employment Agency and NIPA on
                                     the development of a foresight study.




3.     WHAT HAS ALREADY BEEN ACHIEVED?

Examples of achievements in the Cogent sector industries include:

Evolvonline™
       Evolvonline™ is a unique, sector-specific e-portal. It will feature the
          sector‟s largest library of web-based learning materials and courses,
          specifically compiled to enhance skills development in its sector.
       The Evolvonline™ portal will provide a single, cost-effective training
          resource for individuals, SMEs and corporations in the oil and gas
          extraction, chemicals manufacturing and petroleum industries.



                                                                                  59
                                                           Cogent Market Assessment


Polymer on-line learning
      Injection Moulding Technology Training, named “Online Product of the
         Year” by WOLCE.

Rural Filling Stations Initiative
        Cogent has completed a study establishing a skills profile for business at
            rural filling stations, in partnership with the Petrol Retailers Association
            and Garage Watch. A report was presented to the DTI‟s Rural Taskforce
            in May 2003.
        The overall objective of this initiative is to develop specific training
            programmes and funding mechanisms in the medium term to support the
            viability of rural operations.

Talking Jobs
        Talking Jobs is an innovative online career information service aiming to
          stimulate young people‟s interest in the wide and diverse range of jobs
          and career opportunities in the oil and gas industry.
        More than a simple internet database of careers in the sector, “Talking
          Jobs”, which can be accessed at www.ceg.org.uk, brings to life the real
          nature of the jobs available to young people through interviews with those
          who actually do them in their own working environment.
        The website profiles 30 young people from 16 participating organisations,
          ranging from offshore operators to drilling, catering and well services
          companies.
        It also links with careers education resources and industry-specific links to
          create an extensive bank of information not only on jobs within the
          industry, but also on learning opportunities and related issues.

Vantage
          Vantage POB is the new centralised personnel on board (POB) tracking
           system which has been developed during 2002 for most of the oil and gas
           companies operating in the UKCS.
          The system has been developed via a pioneering LOGIC managed
           collaboration project involving operator, training, helicopter and
           information technology organisations. Following implementation, LOGIC
           will manage the new service which will be delivered via an SLA supported
           Application Service Provider model.
          Implementation started in Q4 2002, completed Q2 2003.
          Vantage POB also incorporates the existing Vantage OP (Offshore
           Passport) data, thereby delivering the functionality of two systems via one.

Oil and Gas MA Programme
        The Modern Apprenticeship programme for the upstream oil and gas
          industry was launched in 1999.
        In summer 2003, the first 12 trainees to enrol in the Oil and Gas Modern
          Apprenticeship programme completed the course and joined the sector‟s
          workforce as fully skilled professionals. Ten have been following the
          Processing Operations programme and two were enrolled in the
          Engineering Maintenance programme.
        The most significant development since the programme‟s inception has
          been the harmonisation of the Cogent and ECITB training schemes in
          which both organisations have developed a common syllabus for the MA,
          with the two industry employer bodies (UKOOA and OCA) agreeing
          identical terms and conditions.


                                                                                     60
                                                         Cogent Market Assessment



Development of occupational standards
       As listed in Appendix to Market Assessment.

North Wales MA Programme
       The Education and Learning in Wales agency (ELWa) has commissioned
         Cogent to undertake a study identifying the demand profile for a Modern
         Apprenticeship course for the offshore and chemicals sectors in North
         Wales.

Cumbria Chemicals Companies Cluster
      Cogent is working closely with the Cumbria Learning and Skills Council
         (LSC) to bring together a cluster of companies associated with chemicals
         manufacturing within the local region.
      The purpose of the cluster is to identify common skills and training
         development issues and address these with local collaborative initiatives
         supported by partner training providers.

Developing People
       An Industry Advisory Group (IAG) has been formed by Cogent to look at
         e-learning and other topics relating to petroleum retail, such as standard
         courses in fire fighting, Health and Safety on the forecourt, substance
         abuse and first aid.
       This project, one of the first undertaken by the IAG, aims to create a
         generic version of BP‟s “Developing People” e-learning programme, which
         the oil company agreed to make available to the rest of the retail forecourt
         industry via the Cogent portal Evolvonline™.
       The programme, which will be rolled out as two packages, Sales Assistant
         Induction and Competent Person, provides high quality online training
         combined with offline practical exercises and provides both the learner
         and the employer with a detailed analysis of the learning experience. On
         successful completion of the course, the learners will gain a Cogent
         certificate detailing their achievement.

Forecourt Operations NVQ Pilot Programme
       A pilot programme for the introduction of a Forecourt and Retail
          Operations NVQ has been launched to help employees achieve their
          potential at minimal cost to employers, from large players to independent
          outlets.

DTI/NWDA Process Engineering Initiative
       Cogent has been commissioned by the Department of Trade and Industry
        (DTI) and North West Development Agency (NWDA) to undertake a
        study, assessing the skills shortages within the Process and Design
        Engineering Sector in the North West, and establishing whether these
        gaps are addressed by the local education sector and training providers‟
        network.
       The study will also seek to identify new training and skills development
        requirements and establish funding routes for both existing and new
        training programmes.
       The study will focus on providing tangible, short-term solutions (within five
        years) aimed at meeting the sector‟s immediate needs.




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                                                        Cogent Market Assessment


ESOL Initiative
       Cogent is working in partnership with relevant agencies on an initiative to
          develop English for Speakers of Other Languages (ESOL) in the
          downstream petroleum industry.

Chemicals Companies Competence Assurance Services
      Cogent has been invited to deliver competence assurance services for
         chemicals companies Polimeri Europa and for Rhodia Pharma Solutions.
      This work will involve advising these companies on the development of
         standards of competence, implementing them through robust assessment
         and verification, and embedding them as part of their business.
      The initial focus of these projects will be on process operations and
         maintenance, of which Cogent has good experience.
      The objectives in both cases are to help the companies meet the
         requirements of their regulators and to add value to their existing systems
         for managing and developing their human resources.

Polymer Processing MA Framework
      The Apprenticeships Approvals Group (AAG) has approved a framework
         for a Foundation and Advanced Modern Apprenticeship for the Polymer
         Industry, submitted by Polymer NTO.
      MAIG has approved the framework for a Modern Apprenticeship for the
         Polymer Industry, submitted by Polymer NTO.

Signmaking MA Framework
      The Apprenticeships Approvals Group (AAG) has approved a framework
         for a Foundation and Advanced Modern Apprenticeship for the
         Signmaking Industry, submitted by Polymer NTO.
      MAIG has approved the framework for a Modern Apprenticeship for the
         Signmaking Industry, submitted by Polymer NTO.

Chemicals and Downstream MA Framework
      The Apprenticeships Approvals Group (AAG) has approved a new
         framework for a Foundation and Advanced Modern Apprenticeship for the
         Chemical, Pharmaceutical, Petrochemical Manufacturing and Refining
         industries, submitted by Cogent after review, with industry support, of the
         former version.
      MAIG has approved the framework for a Modern Apprenticeship for the
         Chemical, Pharmaceutical, Petrochemical Manufacturing and Refining
         industries, submitted by Cogent after review, with industry support, of the
         former version.

MA Programme for Engineering in South Wales
       A Modern Apprenticeship Programme for Engineering in South Wales has
         been set up by the South Wales Oil Industry and Learning network
         (SPOIL).
       The South Wales Oil Industry Learning network (SWOIL) has reached a
         milestone with the approval of a bursary scheme between TotalFinaElf
         and Texaco to fund a Modern Apprenticeship programme in general
         engineering.




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                                                         Cogent Market Assessment


Chemicals Innovation and Growth Team
      The Chemicals Innovation and Growth Team was set up in January 2002
         to address the key challenges facing the UK chemicals industry through a
         new strategic dialogue involving the industry and its stakeholders.
      The objective of the CIGT was to develop a roadmap for the industry‟s
         future development to ensure that it can remain a valuable part of the UK
         economy and can flourish.

Enviroskills project
       Cogent has worked with the South West Regional Development Agency
          (RDA) on an Enviroskills project to promote environmental skills.

Technician Training Charter
       The UK offshore oil and gas industry and its two main training
         organisations, Cogent and the Engineering Construction Industry Training
         Board (ECITB), have signed up to a Charter that will deliver a multi-million
         pound training scheme aimed at attracting young technicians and
         sustaining the skills requirements of the Industry.
       The Upstream Oil and Gas Technician Training Scheme involves 18-24
         months of practical learning and further education in electrical, mechanical
         and instrument core disciplines, followed by around two years of on-the-
         job training. Opportunities to specialise further in well services and
         process operations are also available.

E-BOSIET and Employing Companies Induction CDs
      Two CDs - E-BOSIET and “Employing Company Induction” - have been
         produced to transform the way new workers can gain competence in the
         required Health and Safety Executive (HSE) legislation and good
         practices before they go offshore.

Young Engineers Clubs
       Young Engineers Clubs, sponsored by the Scottish Council for
        Development and Industry (SCDI), have been set up within schools in
        Scotland to stimulate young people‟s interests in technology.
       Cogent and the DTI first met the schools as part of the Orkney and
        Shetland science festivals in September and November 2002. Through
        presentations, secondary school pupils were given an insight into the oil
        and gas sector and details of a wide range of career opportunities within
        this exciting industry.
       However, to further capture the pupils‟ interest in engineering and
        technology innovation, Cogent and DTI set the schools a challenge: each
        school was given a robot kit, from which they were to design and build a
        working model of a remote vehicle for the oil and gas industry that would
        collect rock samples from the seabed with ping-pong balls being used in
        place of rocks. Pierowall and Stromness schools completed this task
        successfully and were rewarded with the trip to Hampden.
       Cogent and the DTI enabled pupils and teachers from the Pierowall Junior
        High Schools on the Scottish Island of Westray and from the Stromness
        Academy on Orkney to fly to Hampden, Glasgow, on 20th June 2003 to
        take part in the 2003 SCDI and Young Engineers Clubs Showcase and
        Technology challenge.
       This annual event saw 19 local companies set challenges for the
        youngsters and provided a great opportunity for Young Engineers Clubs
        within 30 Scottish schools to show their technology talents.


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                                                       Cogent Market Assessment



Polymer Executive Forum East Midlands
      The recognition of the polymer sector as a key sector in the region
         (originally not highlighted by the RDA or a number of the LSCs within the
         regions).
      Funding to support a survey of specific industry needs within the region
         (£15k).
      Funding to support the existing workforce to develop Basic Skills (£7k).
      Funding to establish the current provision of vocational training and
         education within the region (£30k).
      Group application to secure £1.1m of capital funding for the provision of
         technically relevant equipment for the rubber, plastics and sign making
         sector, in support of education and training.

Polymer Executive Forum West Midlands
      Funding for £1.2m of capital equipment for vocational training and new
         business start up units to assist companies to diversify into new product
         areas.
      Funding to provide companies with free technical and process
         optimisation audits (£50k).
      Continuous funding for companies affected by the Rover situation and
         operating within the M54 corridor (£300k).

Northern Ireland Polymers Association
       The Northern Ireland Polymers Association (NIPA) [comprising approx 60
          companies] has been working with the Polymer NTO and the Training &
          Employment Agency. As a direct result a skill foresight study has been
          undertaken and a sector Workforce Development plan has been prepared
          for Northern Ireland. An executive forum is to be set up via the steering
          group to address the priority actions within the SWDP.

Polymer Executive Forum Scotland
      Funding to identify specific sector needs in the country (£20k).
      Support for an application to secure a multi-million pound investment to
         establish a Centre of Excellence for Polymer Composite Research and
         Development.

Improving Competence in Literacy and Numeracy
       The Polymer NTO ran a pilot, funded through the East Midlands
         Development Agency, to help employees in the industry to improve their
         competence in literacy, numeracy and language.
       Working In conjunction with West Nottinghamshire College and Boston
         College, Cogent (formerly Polymer NTO) is continuing to develop training
         packages.




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                                                               Cogent Market Assessment


SOURCES                                                                       Appendix 6

1    DTI, Nuclear and Radiological Skills Survey Report of the Nuclear skills Group, 2002
2    CMPNTO, Chemical Industry‟s Employment and Training Survey, 2001
3    OPITO Skills Foresight Report, March 2000
4    DTI, Production Operations and Maintenance Technician Survey, 2002
5    PINTO, Foresight on Skills, 2002
6    Polymer NTO, Skills Foresight Signmaking, 2002
7    Polymer NTO, Workforce Development Plan for the Rubber Industry 2002 – 2004
8    Polymer NTO, Workforce Development Plan for the Plastics Industry 2002 – 2004
9    CMPNTO, Sector Workforce Development Plan 2002
10   The United Kingdom Petroleum Industry Association (UKPIA) www.ukpia.org.uk
11   The Nuclear Industry Association http//www.nia.org
12   DfES, Process Industries Skills Dialogue, 2002
13   DTI, Business Clusters in the UK: A First Assessment, February 2002
14   NTP Scotland, Broad Level Research Report on Gender Imbalance in the Oil and
     Gas industry in Scotland
15   Polymer NTO, Polymer Industry Sector Targets „Consultation Document‟
16   UKOOA, Economic Report “Competing in a Global Economy”, 2002
17   Oil and Gas Industry Task Force Report, A Template for change, September 1999,
     Innovation and Technology Workgroup Report, P. 18
18   CIGT, „Enhancing the Competitiveness and Sustainability of the UK Chemicals
     Industry‟, December 2002.
19   Institute of Petroleum, Retail Marketing Survey, 2003
20   UKOOA, Environmental Report 2002
21   British Nuclear Fuels www.bnfl.com
22   UKOOA, Energy Breakfast, presentation by Sir John Wood, Wood Group plc
23   DTI, Competitiveness Analysis of the UK Rubber and Flexible Foam Industries,
     September 2001
24   Department of Transport, Powering Future Vehicles Strategy
25   DTI, Managing the Nuclear Legacy – a Strategy for Action, July 2002
26   Skills Dialogue: Listening to Employers – An Assessment of Skill Needs in
     Engineering
27   Polymer National Training Organisation polymernto.og.uk
28   Office of National Statistics, Trends in Female Employment, Melanie Duffield, 2002
29   Employers Skill Survey, Hillage et al, 2002
30   Britain‟s Relative Productivity Performance: Updates to 1999 – Final Report to DTI/
     ONS, Mary O‟ Mahony and Willem de Boer
31   United Kingdom Petroleum Industry Association
32   DfES Statistics
33   Draft Nuclear Sites and Radioactive Substances Bill
34   British Rubber Manufacturers Association www.brma.co.uk
35   The Official Yearbook of the United Kingdom and Northern Ireland, 2003
36   British Plastics Federation www.bpf.co.uk
37   White Paper; Our Energy Future: Creating a Low Carbon Economy, 2003
38   Energy Sector Indicators, Department of Trade and Industry, March 2003
39   The Global Nuclear Fuel Market Supply and Demand 2001-2020: World Nuclear
     Association Annual Symposium 2001
40   Energy Trends, Department of Trade and Industry, March 2003
41   BP Statistical Review of World Energy, 2001




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