Economic development agency Scottish Enterprise is making a push to keep Scotland at the top of the global subsea market, despite the challenges offered by competition from other regions around the world and the harsh realities of the severe industry downturn.

As a nondepartmental public body of the Scottish government, Scottish Enterprise has set up an action plan for the country’s important subsea sector—with grants on offer to promote invention and development of new technology that will push the sector forward.

Scotland’s 370 subsea companies already generate annual turnover of $9.4 billion, with the global market currently valued at about $62.7 billion per year.

“To realize our subsea engineering ambitions, we need to make sure the investments are made to keep our supply chain competitive, ensure our infrastructure offers appropriate research and testing facilities [and] offer the technology required for the oil and gas industry and other subsea sectors,” added Scottish Enterprise.

“Our action plan has been designed on Scotland’s existing strengths in subsea engineering, helping our oil and gas companies find new opportunities at home and abroad,” said Scottish Enterprise. “In fact, with almost half of all the world’s subsea installations in the North Sea, Scotland is a global leader in the sector. These strengths mean Scotland is in a strong position to find new opportunities for growth in international markets and to diversify existing skills into other sectors.”

Enpro Subsea Gets R&D Grant

A key part of Scottish Enterprise’s action plan is supporting innovation, and Aberdeen-based Enpro Subsea has landed funding for a new R&D project designed to maximize economic recovery from subsea wells and reduce costs for operating companies.

“We’ve supported Enpro with a £755,000 [US$947,256] R&D grant to help the company design, develop and test the new technology it plans to introduce to the subsea sector. This is the first time we have supported Enpro Subsea. This funding has given Enpro the confidence to continue our product development for local and export markets,” said Ian Donald, Enpro’s managing director. “This assistance from Scottish Enterprise will enable Enpro to develop the next generation of subsea enhanced production intervention equipment to increase oil recovery and address emerging markets in deeper waters.”

David Rennie, international sector head for oil and gas at Scottish Enterprise, said Enpro is “no stranger to innovation.”

“However, faced by the impact of the current downturn in the sector, our support means the company can deliver this nine-month project on schedule, helping strengthen the company’s market position for when the sector recovers and safeguard existing high value oil and gas jobs,” he said. “Many technologies developed in Scotland have revolutionized the worldwide oil and gas industry. It is this experience and reputation that is the basis for this action plan. We want to build and maintain what we already have, develop new opportunities and ensure we have the infrastructure we need to remain a world leader.”

Neil Gordon, CEO of industry body Subsea UK, added, “Scotland has the largest concentration of subsea engineering in the world, with Aberdeen recognized globally as a center of subsea excellence. A stronger supply chain will generate jobs, opportunities and wealth for Scotland as well as securing our world-leading position in subsea.”

Subsea Focus Areas

Scottish Enterprise’s action plan has identified three key areas where it believes its support can help the subsea sector: position Scotland as a global leader in subsea engineering; increase investment in innovation to grow Scotland’s market share in oil and gas and support diversification into other sectors; and develop Scotland’s subsea innovation infrastructure.

Scottish Enterprise believes the country’s long-term future success also will be built on certain capabilities that can be readily exported:

  • Specialist services throughout the Life of Field including feasibility studies (e.g., survey and analysis for oil fields or offshore wind sites); FEED of proposed new developments; equipment procurement, investment and construction; enterprise asset management; inspection, repair and maintenance; decommissioning;
training, testing and consultancy;
  • Subsea umbilicals, risers and flowlines; and
  • Specialist tooling, sensor, control and communication products for use in ROVs, AUVs and submarines.

“Many technologies developed in the North Sea are now in worldwide usage. For example, the subsea xmas tree system, commercially pioneered in the North Sea has revolutionized the oil and gas industry worldwide. Of the 5,000 subsea wells globally, almost 2,000 are in the North Sea, yielding a huge amount of technology development knowledge and expertise,” Scottish Enterprise said.

“Scotland is also a hub of cutting-edge research and development, with the expertise residing within the Scottish workforce exported around the world,” the agency added. All the major global oil and gas engineering companies have significant operations in Scotland, including FMC, GE, OneSubsea, Aker, Subsea 7, Technip and Bibby Offshore.”

Innovation Ecosystem

To support these operations Scotland has developed an “extensive innovation ecosystem.”

“The Underwater Centre in Fort William, National Hyperbaric Center in Aberdeen and the Centre of Excellence for Flow Measurement and Fluid Mechanics in East Kilbride are key assets at both a Scottish and U.K. level. There is a variety of academic and research institutes with capability in this area,” Scottish Enterprise said.

“If we make the right decisions and continue to attract investment from both indigenous and overseas companies, we can help this sector grow from strength to strength. Such growth will be achieved through a mix of strategic investments in enabling infrastructure, supporting the Scottish supply chain break into and grow in international markets and investigating diversification opportunities while maintaining support for the substantial core oil and gas and decommissioning opportunities.”

—Steve Hamlen