Subsea Industry Urges Government to Support the UK’s £9billion Sector in the Face of Lower Oil Prices
13 June 2016
MPs and Cabinet Ministers will be urged to do everything they can to protect the £9billion subsea industry at a Parliamentary Reception this week.
Industry body, Subsea UK, is leading a delegation of high profile subsea leaders from companies across the country’s supply chain to Westminster on June 15thto outline what is required of Government to help the industry in the lower, for longer oil price environment.
According to Oil & Gas UK, around 120,000 oil and gas will have been lost by the end of 2016, since the oil price collapse. Subsea UK reckons that, of those, around 5,000 are in the subsea sector. The organisation’s recent "snapshot” survey revealed that 90% of subsea companies had seen a fall in revenues, with 28% seeing a drop in sales of between 30-40% and a further 28% losing half or more.
Subsea UK chief executive, Neil Gordon, said: "This is having a major impact on the £9billion sector which previously supported around 53,000 jobs and contributed significantly to the country’s balance of trade with over £4billion in export revenues.
"The good news is that our subsea businesses are continuing to invest in research and the development of new technology which is vital to maximising economic recovery in the North Sea, prolonging its life and allowing UK plc to get more value from the basin.”
The UK’s subsea sector leads the way around the world with about a 43% of the global market and subsea firms are continuing to explore new markets overseas for their products and services.
Mr Gordon added: "We need our political leaders to understand the importance of the sector and the challenges it’s facing. Investing in and supporting the sector is not just about the North Sea, it’s about protecting our globally recognised supply chain and its ability to drive up UK exports, safe-guarding and creating jobs in the longer term.
"Our ask is very clear. We urgently need government support and funding for R&D, greater incentives that will stimulate exploration in the North Sea, including models for exploiting the smaller, currently uneconomical pockets of hydrocarbons and increased, focused support for maintaining and increasing our export potential.”
The findings from Subsea UK’s survey revealed that over 80% of respondents were hoping to drive growth by increasing overseas sales in Asia, the Middle-east, North America and Africa. Other countries of interest were Australia, China, Brazil and Norway.
Mr Gordon also stressed that the ingenuity and pioneering technology and expertise in the subsea sector is key to unlocking other energy sources, particularly in marine renewables.
He said: "We hope the Government will recognise the importance of our sector and the thousands of jobs we support up and down the country. Until the oil price collapse, subsea was one of the fastest-growing industries in the UK, with a world-leading position. This position is now under threat unless we can sustain our supply chain, develop and commercialise the next wave of underwater technologies required to exploit our hydrocarbon and renewable resources around the world, and ensure we are creating and enthusing the next generation of subsea engineers.”
Over 30 businesses will attend the reception at Westminster, including Apache, Bibby, Ashtead Technology, BP, Infield and the Society for Underwater Technology.
Representing more than 300 members, Subsea UK is a self-sustaining industry body that champions the country’s subsea supply chain both at home and abroad. It acts as a focal point to promote the sector and maximise its opportunities as well as provide a national forum for collaboration, diversification and technology development.