The fast-growing UK subsea sector, which supports 60,000 jobs, is in for two years of tough times.
An Infield report showed subsea tree orders, a major indicator of subsea activity, is expected to fall by nearly 30% between 2014-2019. This sector will only weather the storm if it embraces innovation and new technology, says industry body.
On the opening day of Subsea Expo, Neil Gordon, Subsea UKchief executive, told delegates that the industry is facing considerable challenges but the fundamentals in subsea remain relatively strong and the sector could see a significant improvement in 2017 – 2019.
“The swinging capex cuts and low crude price are beginning to bite. The UK’s subsea sector came out of a strong 2013 to a relatively flat second half of 2014. The existing order book kept the industry going but, as this dries up and projects are abandoned or postponed until the oil price recovers, we are in for major challenges,” says Gordon. “According to Infield, overall capex growth predictions start to become more positive after 2016. It is therefore imperative that during this period Subsea UK demonstrates strong leadership by pushing the industry to more quickly adopt innovation and technology. While subsea companies must speed up the development of new technologies, the industry must be prepared to embrace new technology. It has to become less risk-averse and more receptive to supporting field trials and implementation of new technology.”
Subsea UK is urging companies to turn to the re-launched National Subsea Research Initiative (NSRI) to bringing academia and industry together in a much more meaningful way, and to collaborate on getting new technology to market much more quickly.
“NSRI deals with R&D at all stages, from initial concept through to market readiness but, in the current climate, we anticipate a real focus on those technologies which are nearest to market,” said Gordon Drummond, project director of NSRI.
In addition to driving innovation and technology, Subsea UK will also be engaging with the UK Government so that they fully understand and recognize the size, strength and capability of the subsea industry, which supports 60,000 jobs up and down the country.
Image from Subsea UK