Subsea Industry's Vision for Global Dominance

12 February 2010

Britain's subsea companies were yesterday set the daunting target of more than doubling their exports over the next four years to retain the sector's competitive edge in the global market place.

The ambitious target was announced by Alistair Birnie, the chief executive of the pan-industry trade body, Subsea UK, on the final day of Subsea 2010, the industry's annual showcase at the Aberdeen Exhibition and Conference Centre.

Mr Birnie said that new government tax incentives to encourage exploration and production in the waters of the Atlantic Frontier, west of Shetland, were welcome.

But the sector would have to look to the expansion of exporting its expertise and equipment to sustain the 40,000 jobs in the UK's subsea companies.

Mr Birnie said the sector had already become established as one of the highest-performing and fastest-growing in the UK.

He said: "Through the UK's subsea capability, competency and capacity, the sector has become world-leading with the expertise and experience gained from the pioneering days of subsea oil and gas production in the North Sea now in global demand."

But he warned: "The UK Continental Shelf is becoming much tougher to extend with rewards often not able to sustain costs.

"However, international subsea business is set to grow from $40 billion to around $60bn in four years and opportunities in renewable energy are starting to become more tangible.

"To sustain the UK's subsea sector, we have to transform our exports from around $4bn at present to around $10bn."

Subsea UK has produced an action plan to help companies expand into international markets and to identify potential areas of growth in the demand for subsea expertise.

Mr Birnie said: "We are certainly seen as the centre of excellence at this point. But that will only continue to be the case if we retain our market share for the medium and long term.

"The growth is in the international market. We don't foresee that percentage of growth happening within the UK sector."

He explained: "The UK sector, we think, is going to be stable, depending on what happens west of Shetland. That could spark things on a little, but nevertheless we can't expect the UK sector to continue to grow indefinitely.

"In the UK we see the future – not in big field developments – but sustaining ageing infrastructure and production through improvements in reliability.

"Key areas of potential growth, he said, were the Asian Pacific, particularly Australia, and the waters off Egypt and Libya.

"We want to make sure we are part of that," said Mr Birnie. "Our key objectives this year are to deliver measurable services that make a real difference in the areas of export, skills and technology.

"Collaboration will also be essential for the future and Subsea UK is already working with partner organisations and stakeholders to develop new initiatives such as joint industry projects.

"The skills shortages have not gone away and will very shortly start to constrain growth once more. The industry as a whole has to work together to ensure new skills are developed."