Subsea UK calls for national program

September 1, 2013

Subsea UK is calling on the UK government to back plans for a national program that will support and fund subsea research, and a UK-wide skills program that will help the sector find the 10,000 people it needs to capitalize on current and future demand, nationally and internationally. Subsea UK was formed by the UK government and industry in 2004 as a focal point for stakeholders to promote and develop the sector at home and abroad, maximizing its international and diversification opportunities. Subsea UK now represents a major part of the subsea industry with over 250 members throughout the UK.

Subsea UK CEO, Neil Gordon, said at a parliamentary reception in London this summer “Extracting the UK’s remaining reserves is now heavily dependent on subsea innovation and skills. Already, almost 45% of UKCS production comes from subsea wells and new developments will take this up to 70%. Getting the remaining oil out of the ground, in the North Sea and in other deeper water provinces around the world, will largely rely on the next wave of subsea innovation. But, we are not investing in R&D to the same extent as competing countries in Brazil, the US, and Norway.”

Neil Gordon, energy minister Michael Fallon, and Sir Robert Smith, MP for West Aberdeenshire and Kincardine.Brazil’s oil and gas R&D fund, managed by ANP, is projected to raise almost £6billion by 2020. Norway’s Demo 2000 program has attracted around £7million/yr and in the US, the DeepStar joint industry technology development project receives annual funding of £2.4million. In comparison, there has been zero investment from UK industry and government in any similar programs in the last 15 years. The UK’s current success in subsea is due to industry and government investment in the early years of the North Sea when it was a test-bed for subsea equipment and processes.

Gordon added: “Our blueprint reveals that for our industry to continue to create jobs, generate wealth and export revenues, we need significant funding for R&D, a national skills program that will create a sustainable pipeline of new talent into the sector, an effective government-led and funded technology development program and a stable fiscal regime that encourages investment in game-changing technology.”

“A national subsea R&D program would help extend the life of ageing North Sea assets, ensuring maximum recovery of remaining reserves in a commercially viable way, it would underpin the long-term future of a major UK manufacturing and service industry and have a positive impact on the emerging marine renewables sector,” he added.

Subsea UK has just launched a UK-wide initiative to attract people into the subsea sector, but believes that more needs to be done to raise the profile of the industry and ensure that subsea companies have access to a pool of engineers, technicians, and project managers now and in the future. Thechallenges in finding suitably qualified people, particularly in engineering disciplines, have come about as a result of the decline in the number of school children taking up math and science subjects, the ageing workforce in the oil and gas industry, the industry’s perceived negative reputation, and increasing global competition.

Gordon said: “We are already working with schools and universities, as well as rolling out conversion training programs for engineers coming into subsea and for former military personnel but we need a much more concerted effort between the industry, education and government to make sure we have a sustainable pipeline of talent.”

Subsea UK estimates that the UK’s subsea industry is now worth £8.9 billion, about 45% of the £20 billion global market. A new survey of more than 750 companies throughout the entire supply chain shows that 16,000 new jobs have been created in the sector since 2010, bringing the total number of jobs supported by the industry to 66,000. This figure takes account of the 53,000 directly employed in the subsea industry as well as the 13,000 in jobs which indirectly support the sector.

Of the direct subsea workforce, 48% work in services which include engineering, construction and diving. Manufacturing accounts for 19% of the 53,000 jobs. Almost half the respondents are anticipating growth in excess of 20% in the next three years, with 28% predicting to grow by 10-20%, only 1% predicting less than 10% growth, and a further 28% forecasting no growth. If these forecasts are achieved, the sector could grow to £11.1 billion by 2016. The increase in activity in the North Sea has played a major factor in this continued growth but exports remain high, accounting for 43% of total revenues. OE



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