WorldCity, Annual Report: No. 5 United Kingdom - Setting a fast pace in trade | Connecting Local Business Leaders To The Global Economy

Annual Report: No. 5 United Kingdom - Setting a fast pace in trade

July 6th, 2006

Scottish oil fields are playing a starring role in dramatic trade growth between Houston and the United Kingdom.

It was all about speed.

Houston imports from the United Kingdom nearly doubled in 2005, pushing bilateral trade between the Customs district and the European country to a record $5.8 billion. Among the biggest trade partners, only oil-rich Angola saw its imports – and overall trade with Houston – grow at a faster clip.

Houston’s imports from the United Kingdom hit $3.7 billion, compared with $1.9 billion in 2004. Although exports from the Houston-Galveston Customs District did not grow at such a quick pace, they nonetheless swelled nearly 21 percent to end 2005 at $2.1 billion.

That resulted in a more than 58 percent hike in trade between the United Kingdom and the Houston-Galveston Customs District in 2005.

Imports of U.K. crude oil accounted for 43 percent of total imports from Houston’s fifth most important trade partner. In 2005, crude oil imports reached $1.6 billion, up 241 percent from a year earlier.

Refined oil, worth $389 million, was a distant second on the import roster. That reflected a 173 percent jump from a year earlier. The United Kingdom and other European members of the International Energy Agency were crucial in supplying refined oil to the United States after hurricanes Katrina, Rita and Wilma battered the U.S. Gulf Coast in 2005.

At the same time, Houston and Aberdeen, Scotland, have been involved in the World Energy Cities Partnership since 2000. The 13 cities in the partnership share petroleum industry knowledge and infrastructure strategies.

Considered to be the offshore energy capital of Europe, Aberdeen is also the center of oil and gas exploration and production in the United Kingdom. There are currently 121 oil fields in production in nearby Aberdeen and nine fields under development. Amerada Hess, a global energy company with its exploration and production division in Houston, is redeveloping its oil field in Scotland’s Shetland Islands.

Among energy imports, the greatest percentage growth came with natural gas. In 2005, some $89 million-worth of gas was imported. A year earlier, it was $16.2 million.

In addition to oil products, Houston also imported U.K.-made oilfield machinery valued at more than $127 million, an increase of nearly 48 percent. Most of the machinery shipped through the port was destined for the Gulf of Mexico oil patch.

Elsewhere on the import roster, shipments of aircraft parts soared to near $100 million, a jump from nearly $66 million a year earlier. Imports of regional jet parts alone exceeded $75 million, a jump of 26 percent. Parts for other aircraft skyrocketed by 267 percent, ending the year at $24.4 million.

The United Kingdom has the second largest aerospace industry behind the United States; British aircraft engine manufacturer Rolls-Royce is a leading supplier to the North American market.

On the export side, Houston shipped $2.1 billion-worth of goods to the United Kingdom, up nearly 21 percent from $1.7 billion in 2004. Leading the export roster were machinery parts – mostly oilfield related – such as cranes, winches, derricks and conveyors.

Houston sent Mexico nearly $254 million of these parts, up 28 percent from 2004. Of that, more than $171 million were parts for boring and sinking equipment used for drilling oil and natural gas; Houston sold $81 million worth of parts for cranes.

Outbound sales of regional aircraft parts also climbed, by 82 percent, to $203 million. Refined petroleum exports grew even faster, rising 146 percent to $182 million.

Computer exports fell 16 percent to $43 million while those of computer parts saw a modest 2.3 gain to $41.7 million.

The U.S. also exported $41.5 million worth of synthetic rubber through Houston ports, up almost 50 percent from nearly $28 million in 2004.