Subsea UK calls for "radical rethink" on UKCS investment strategy

News - July 1, 2009

The chief executive of Subsea UK has called on the Government to take action over recent actions by the banks which are threatening the future of the UK’s subsea oil and gas industry.

Speaking from the House of Commons where Subsea UK members addressed over 40 parliamentarians - including energy minister Lord Hunt - Alistair Birnie, chief executive of the industry body, says: “We must as a matter of urgency curtail the predatory behaviour of some of the key banks acting in their self-interest which is jeopardising jobs and the long-term future of an industry which supports over 40,000 jobs contributing over £4.5 billion to the UK economy."

“The subsea sector works as a diverse but highly focused supply chain providing world-class skills and technology that enable oil and gas operators to extract the remaining hydrocarbons from under the world’s oceans."

“A strong diversification capability is already being put to use in the renewable energy sector. But this highly expert and experienced supply chain needs investment and support from the banks if it is to develop the next generation of skills and technology required to secure a sustainable future."

“Equally, as the aging UKCS continues to mature, we desperately need to radically re-think our investment strategies and plan for the long-term. Working with mature assets requires a completely different mind-set and attitude from the banks and Government. Failure to understand this will, and is already, accelerating the decline of UKCS production.”

The Subsea UK parliamentary reception aimed to educate MPs about the fast-growing subsea industry, its challenges and opportunities.

Mr Birnie presented an overview of the sector and then three Subsea UK members talked about how they have developed and implemented new ways of working to cope with current economic conditions and ensure a sustainable future that impacts positively on the economy and the communities in which they operate.

Mike Wagstaff, chief executive of Venture Production plc outlined the value of their innovative supply chain model and how they work with key contractors to ensure they can fast-track projects effectively, safely and within budgets.

Subocean Group has successfully transferred its subsea oil and gas business into marine renewables where they are currently working on most of the UK’s major offshore wind developments.

To compete effectively in the renewables industry, Subocean has implemented an unusual payment up-front model with clients. John Sinclair, managing director of Subocean will demonstrate how this is working to benefit both the company and the offshore wind industry.

Fast-growing Bibby Offshore will talk about its commitment to the subsea sector and the internationalisation of its business through providing new, highly specialised dive support vessels.

Jeremy Punnett, strategic development executive of Bibby Offshore will also tell MPs that it has opened an office in the North east of England to help it meet its skills shortages and take advantage of the resources available in that region which has seen rises in unemployment as a result of the recession.