The U.K. subsea industry has urged the government to do everything it can to protect the $13 billion sector in the face of lower oil prices.
Industry body Subsea UK lead a delegation of high-profile subsea leaders from companies across the country’s supply chain to Westminster on June 15 to outline what is required of the government to help the industry in the “lower for longer” oil price environment.
According to Oil & Gas UK, about 120,000 oil and gas jobs will have been lost by year-end 2016, since the oil price collapse. Subsea UK reckons that, of those, about 5,000 are in the subsea sector.
The organization’s recent “snapshot” survey revealed that 90% of subsea companies had seen a fall in revenues, with 28% seeing a drop in sales of between 30% to 40% and a further 28% losing half or more.
“This is having a major impact on the £9 billion (US$13.3 billion) sector, which previously supported around 53,000 jobs and contributed significantly to the country’s balance of trade with over £4 billion (US$5.8 billion) in export revenues,” said Subsea UK CEO Neil Gordon. “The good news is that our subsea businesses are continuing to invest in research and the development of new technology, which is vital to maximizing economic recovery in the North Sea, prolonging its life and allowing U.K. Plc to get more value from the basin.”
The U.K.’s subsea sector accounts for about a 43% of the global market and subsea firms are continuing to explore new markets overseas for their products and services.
Gordon added, “We need our political leaders to understand the importance of the sector and the challenges it’s facing. Investing in and supporting the sector is not just about the North Sea, it’s about protecting our globally recognized supply chain and its ability to drive up U.K. exports, safeguarding and creating jobs in the longer term.
“Our ask is very clear. We urgently need government support and funding for R&D, greater incentives that will stimulate exploration in the North Sea, including models for exploiting the smaller, currently uneconomical pockets of hydrocarbons and increased, focused support for maintaining and increasing our export potential.”
The findings from Subsea UK’s recent survey revealed that more than 80% of respondents were hoping to drive growth by increasing overseas sales in Asia, the Middle East, North America and Africa. Other countries of interest were Australia, China, Brazil and Norway.
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