UK subsea industry expecting two tough yearsNews // February 12, 2015
The fast-growing UK subsea sector, which supports 60,000 jobs, is in for two years of tough times and will only weather the storm if it embraces innovation and new technology, says industry body.
On the opening day of Subsea Expo, Europe’s largest subsea event, the chief executive of Subsea UK 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.
Neil Gordon said: “The swingeing 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.”
A new report by Infield today revealed that the major indicator of subsea activity, the order of subsea trees, is expected to fall by almost 30 per cent between 2014 and 2019. Short-term expenditure is being hit by lower than expected order volumes in 2014.
Mr Gordon added: “In the UK, we have the largest concentration of subsea expertise and capability in the world and we must protect that.
"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.
"We need to better explore how projects are currently delivered and then make the step-change to deliver major efficiencies. 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.”