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Oil and gas
for-like travel but, of course, higher budgets generally reflect a buoyant market – for example, many new rigs are coming to the market with firm contracts this year.” Knights also points out that one of the “significant headaches” for buyers has been the varied way that airlines choose to categorise different types of ‘marine’ and ‘offshore’ workers, and hence whether they qualify for reduced airfares. “Not all airlines use the same criteria in what is a very specific category,” he says. “This makes communication and
producer by 2015 – overtaking Russia and Saudi Arabia – according to the International Energy Agency. Dan Hakansson, general manager for the Nordic region at American Express Business Travel, says: “Due to rising fuel prices, drilling and exploration in extreme sites has become even more popular and, as a result, employees have to travel even more extensively.” HRG’s Lancaster adds that
technology allowing companies to find and drill for oil in deeper parts of the sea has helped the North Sea market
“Due to rising fuel prices, drilling and exploration in extreme sites has become even more popular”
application of fares to the customer a difficult
process.Traditional offshore and marine discounts are increasingly harder to come by as airlines reduce capacity in these classes.” Many oil and gas companies also choose to manage their travel budgets project-by-project, rather than on an annual basis, with firms setting out their travel costs as part of the initial bidding process for contracts. HRG’s Lancaster says the industry is very “project-driven”, which means that when spending on a specific project goes over budget, travel costs are likely to be reduced – typically through bans on internal travel between the firm’s offices.
TERRITORIAL EXPANSION Improvements in technology and the persistently high price of oil and gas in recent years have combined to expand the global map for the industry, particularly in the US with the shale energy boom set to help the country to become the biggest oil
to boom in the last 18 months. She says there has also been a major rise in offshore production off Canada’s Pacific coastline, while Ghana has also grown as an energy destination. Australia may be a “key market to watch” according to CWT, due to its new government’s abandonment of several environmental policies and ‘green taxes’, which may fuel a resurgence in the mining and energy sectors. The TMC also highlights Africa as an oil and gas destination, and cites “significant recent growth” in Ghana, Mozambique, Tanzania, Libya and Algeria. FCM’s Ross says that “no two clients seem to travel to the same destination” even within the same continent, due to drilling rights and fierce competition in the market. “While one client will suddenly start travelling to Angola, another will send large numbers of employees to a different African country,” he says. “Russia will become even more important over the next 12 months,
FRACKING IN THE UK
THE CONTROVERSIAL PROCESS of extracting shale gas (popularly known as fracking) has caused a series of protests wherever it has been trialled in the UK – and that’s just with the industry in its infancy, at least in British terms. But fracking is unlikely to go away with the strong support of Prime Minister David Cameron behind it. Cameron reiterated his backing for the industry during the World Economic Forum in Switzerland in January, when he said it could be a “fresh driver” of economic growth in the UK.
Another sign that this industry may be about to take off in the UK is the £12.7 million investment by French oil and gas firm Total in two shale gas exploration licences in Lincolnshire. Total is the first major global energy firm to invest in the UK fracking industry. While buyers and TMCs say it is “too early” to
assess what impact this may have on business travel, it may eventually shift the focus away from the current oil and gas centre of Aberdeen. ATPI’s Adam Knights says: “The larger players are all getting into the fracking industry and see it as a key part of their ‘mix’.We see the need for travel as a similar requirement, just without the helicopters to offshore platforms. Traditional offshore workers going to the North Sea platforms may be going to shale gas sites in the coming years.” But whatever happens with fracking, FCM’s Graham
Ross says it is unlikely to “have a knock-on effect” in reducing demand for the traditional oil and gas destinations in the UK.
due to its potential in the shale gas industry. We are also seeing more travel to South America.” Other untapped areas include Greece, Cyprus and New Zealand, which are “all seeing increased exploration activity and success”, according to ATPI’s Knights. Expect the global travel map to become even wider and the logistics more complicated for buyers in this sector in the next few years, as it continues to be one of the most challenging areas of travel management. ■
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