US bil­lion­aires to cash in on gov­ern­ment oil and gas fund

Ques­tions as pub­lic money handed to NYSE-listed con­glom­er­ate

The Press and Journal (Highlands & Islands) - - Business - BY ERIKKA ASKELAND

Part of a £10mil­lion gov­ern­ment fund set aside for oil and gas re­search and de­vel­op­ment( R& D) projects in Scot­land has been handed to a firm led by two Amer­i­can bil­lion­aires, it has emerged.

Re­cently Scot­tish En­ter­prise awarded a grant of £431,000 to How­den Com­pres­sors, which it said has found trad­ing to be “in­creas­ingly chal­leng­ing due the global oil and gas mar­ket down­turn”.

The Ren­frew­shire-based com­pany is owned by Col­fax Cor­po­ra­tion, a US con­glom­er­ate worth an es­ti­mated $4.5 bil­lion (£3.7bil­lion). The New York Stock Ex­change- listed com­pany was founded by bil­lion­aire broth­ers Mitchell and Steven Rales.

Col­fax ac­quired the UK based How­den as part of a £1.5bil­lion deal to buy its par­ent com­pany Char­ter In­ter­na­tional in 2012.

Scot­tish En­ter­prise said the grant would as­sist a £1.2mil­lion project to de­velop and ex­pand How­den’s range of oil-free screw com­pres­sors.

The firm em­ploys 350 staff at its Ren­frew man­u­fac­tur­ing fa­cil­ity.

The choice of grant re­cip­i­ents raised ques­tions over whether Scot­tish En­ter­prise was wise to hand pub­lic money to vast in­ter­na­tional com­pa­nies.

Alexan­der Bur­nett, Scot­tish Con­ser­va­tive en­ergy spokesman, said: “In­vest­ment in re­search and de­vel­op­ment is vi­tal for any in­dus­try, not least for the oil and gas sec­tor given the re­cent down­turn.

“It is equally im­por­tant, how­ever, that pub­lic money is spent wisely.

“There are a host of in­no­va­tive small to medium sized com­pa­nies in the en­ergy in­dus­try – and in the Aberdeen area in par­tic­u­lar – who could ben­e­fit from this type of fund­ing.

“Tax­pay­ers will rightly won­der why some of these multi­na­tion­als need a help­ing hand from gov­ern­ment when other smaller firms are strug­gling."

Last year Scot­tish En­ter­prise pledged £10mil­lion in grant fund­ing to help more oil and gas and sup­ply chain com­pa­nies in­vest in R&D in the wake of the col­lapse in oil prices.

It said 70 projects have been sup­ported since Fe­bru­ary, which have at­tracted a fur­ther £16mil­lion in­vest­ment from the com­pa­nies. Of these, 84% were small to medium sized busi­nesses, the body said.

Projects also in­cluded a £434,126 grant to One Sub­sea, a divi­sion of Hous­ton­based oil field ser­vices gi­ant Sch­lum­berger.

The fund­ing backed a £1.8mil­lion R&D project that cre­ated five new jobs and safe­guarded a fur­ther 35 roles in Aberdeen.

Mean­while, an­other firm based in Scot­land and backed by ma­jor in­ter­na­tional pri­vate eq­uity firms won a £1.1mil­lion grant for de­vel­op­ment of a new pump sys­tem based on patented mag­net tech­nol­ogy. Zilift es­ti­mated costs for the re­search at £2.3mil­lion in a project cre­at­ing three new jobs in Aberdeen.

Scot­tish En­ter­prise said the prod­uct would have faced a twoyear de­lay with­out the fund­ing boost.

Zilift was es­tab­lished in 2009 and is backed by a con­sor­tium of six pri­vate eq­uity in­vestors in­clud­ing the ven­ture arm of state- backed oil and gas gi­ant , Saudi Aramco.

Mean­while, a smaller Scot­tish soft­ware en­gi­neer­ing firm Science­soft, based in Glasgow, re­ceived £1.5mil­lion R&D fund­ing to­wards its £ 3.6mil­lion project to de­velop an in­te­grated so­lu­tion for chem­i­cal en­hanced oil re­cov­ery ( CEOR) reser­voir sim­u­la­tion. Adrian Gille­spie, man­ag­ing di­rec­tor at Scot­tish En­ter­prise, said: “With­out our in­vest­ment these vi­tal projects would not have hap­pened in Scot­land.

“Our grants help win these projects for Scot­land, an­chor­ing them here and cre­at­ing sus­tain­able jobs in the process.

“The oil and gas in­dus­try recog­nises that busi­ness in­no­va­tion will play a crit­i­cal part in the sec­tor’s global re­cov­ery.

“Last year, 84% of in­no­va­tion projects we sup­ported were with SMEs.

“With larger com­pa­nies that are part of a global group, these R&D projects are of­ten glob­ally mo­bile, with Scot­land com­pet­ing with other coun­tries to win the project.”

“It is equally im­por­tant that pub­lic money is spent wisely”

ALL HAND ON DECKS: Re­search and de­vel­op­ment is said to be par­tic­u­larly vi­tal in the oil and gas sec­tor given the re­cent down­turn

Adrian Gille­spie, MD at Scot­tish En­ter­prise

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.