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The Budget: Subsea UK Comments

23 April 2009

Alistair Birnie, chief executive of Subsea UK welcomed the budget measures relating to oil and gas but believes the Government could have gone much further to stimulate activity in the North Sea.

“The fact that the Chancellor has introduced a package of measures relating to oil and gas signals the Government's improved understanding and appreciation of the issues facing this highly strategic sector in our economy. This will be welcomed by the industry as a step in the right direction. However, it is not a radical enough step that will immediately start to stimulate activity.

“It is vital that investment continues in the UKCS and we anticipate that some of these measures will incentivise movement of assets to the smaller independents operating in the North Sea who must be given every support and fiscal encouragement to eke out the remaining hydrocarbon reserves. Re-use of infrastructure is key as its opens up the opportunity for smaller operators to tie-back to existing facilities and therefore access the more challenging and marginal fields operated by new and smaller players.

“Increasingly the subsea oil and gas sector is transferring its skills and expertise to the marine renewable sector and we are encouraged by the support for renewable energy developments in the budget which should accelerate the delivery of both projects and technology which will lead to jobs in the subsea supply chain.”

Subsea UK is a self-sustaining body that champions the UK subsea supply chain, representing over 200 members. It acts as a focal point for all stakeholders to promote the sector and maximise its opportunities at home and abroad and provides a national forum for collaboration, diversification, and technology development.

The UK subsea industry which employs 40,000 people with revenues of £4.5 billion has recorded growth rates of about 25% year on year for the last four years. Currently leading the way in subsea around the world, the UK has the potential to capture a significant share a global market set to grow to £40 billion by 2012. Subsea production now accounts for almost 50% of all UKCS hydrocarbon output.