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UK Steel Has Major Opportunities in Oil & Gas Says Industry Chief

16 March 2011

The future has never looked so bright for UK steel and metal manufacturers according to the leader of an oil and gas industry body.

Addressing members of Namtec (the national metals technology centre) in Darlington today chief executive of Subsea UK, Alistair Birnie, will outline the opportunities for specialist metals in the global oil and gas market.

'Our estimates reveal that planned subsea oil and gas projects around the world will require around 90 platforms, over 1,000 trees, 80 manifolds and around 12,000 kilometres of pipelines and flow lines,' said Mr Birnie. 'This represents a huge amount of steel with a high content of specialist materials, for which the UK is renowned.

'In the UK alone, new subsea developments will require 23 platforms, 165 trees, ten manifolds and over 1,000 km of pipelines. As global oil and gas projects move into increasingly deeper waters, the technological and metallurgical challenges increase significantly and that is where UK companies can exploit major new opportunities.

'In Brazil where partnerships with British companies are actively encouraged, capital expenditure on subsea oil and gas developments is forecast to be around $230 billion within 4-5 years.'

Mr Birnie said that when combined with future projects, the global opportunity represents a major market for UK companies who have an established reputation for metallurgy.

The UK subsea sector leads the way around the world and UK steel and specialist alloy manufacturers can capitalise on the manufacturing capabilities and expertise of those companies already working on major overseas oil and gas developments said Birnie.

A recent Subsea UK study revealed that the UK's subsea industry is now worth £5.9 billion, almost a third of the £18.9m billion global market, with predictions for it to grow to over £7.5 billion by 2013.

With 40% growth between 2007 and 2010, the industry now supports around 50,000 jobs.

Manufacturing companies employ 40% of the total subsea workforce. Approximately one third of the total revenues generated by the sector is centred on manufacturing and these companies make up nearly half of the subsea sector, contributing 35% of the total output, with almost 30% of these located in North-east Scotland.

'This is great news for British manufacturing and demonstrates the UK's leading role in the development of equipment and technology that is critical to the extraction of oil and gas around the world,' said Mr Birnie.

'Subsea has become increasingly important to the upstream energy sector, both in terms of developing and stimulating further investment in the UKCS and in growing the UK's export base.

'Extracting the remaining world's reserves will increasingly fall to the subsea industry - already almost 45% of UKCS production comes from subsea wells with 70% of new developments planned. It is therefore of vital importance to the security of the world's energy supply.'