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Industry Chief Outlines Major Opportunities for East of England Businesses

05 February 2009

The chief executive of industry body, Subsea UK, today outlined the growth opportunities for energy-related businesses in the East of England at SNS 09 – the annual conference focused on the offshore energy industry in the region.

Alistair Birnie of Subsea UK, which represents the UK's fastest-growing industry sector, said that the Southern North Sea was far from dead or even in decline with emerging opportunities in oil and gas decommissioning, subsea oil and gas projects, marine renewables and Co2 disposal.

Speaking at EEEGr's event, Mr Birnie told delegates that the rising demand for energy in the UK, the high level of interest from major oil and gas operators in the Southern North Sea coupled with improvements to tax incentives would inevitably lead to growth, profits and jobs for the East of England.

“In today's climate of doom and gloom, it will come as welcome news to companies in the energy sector in the East of England that there is emerging potential, which if exploited, could result in real growth opportunities, leading to the creation of hundreds of jobs.”

The 25th licensing round demonstrated the increased interest in the Southern North Sea with operators like Venture, E.On Ruhrgas, Dana, Petro-Canada, Nexen and Centrica all playing for a share in the 307 billion cubic metres of gas potentially still to be recovered.

Mr Birnie added: “Security of energy supply continues to be the main driver for recovering hydrocarbon reserves and, despite the current oil price, the Southern North Sea remains attractive due to the fact that there are still some sizeable fields, there is access to existing infrastructure and proximity to a knowledgeable supply chain.

“While the number of platforms will not increase significantly, the number of subsea developments will expand rapidly. We have seen a dramatic shift in recent years with 40% of oil and gas production in the UK Continental Shelf now coming from subsea wells.

The majority of subsea companies are based in Aberdeen but, Mr Birnie stressed that there is a growing base of subsea skills, technology and expertise in the East of England which must be harnessed and exploited to capitalize on these subsea projects. He said: “Companies that can demonstrate innovation to enable safe and cost-effective recovery of the remaining reserves will be in pole position for winning business now and in the longer-term. It has to be recognised that our competition in subsea is global and to secure this new business, UK companies must focus on delivering quality and value to a consistently high standard. In short, we have to have the technology but also the skills, expertise and innovative business practices to differentiate us from the competition.

The subsea industry in the UK has about 750 businesses, employing 40,000 people and generating £4.3 billion in revenues. With 30% year on year growth, the sector is currently one of the highest performing in the UK.

In his presentation, Mr Birnie also outlined the potential for decommissioning. “Between now and 2026 many installations will require to be decommissioned, several of which I believe will be brought forward. Decommissioning represents an exciting challenge that will require skilled engineers to develop innovative solutions to dismantle these offshore structures with the utmost regard for safety and the environment.”

Finally, he touched on CO2 storage and disposal. “The Government is forging ahead with its CO2 agenda and the infrastructure in the Southern North Sea, closer to the power stations and the beach than other regions, means the East of England is well-positioned to take advantage of this emerging sector.”