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Manufacturing success across Britain’s oil and gas supply chain

Oilfield Technology,

The oil and gas sector is a shining example of how Britain is building on its proud heritage as a world-class manufacturing base. MTA Director General Graham Dewhurst discusses how vital it is to maintain a technological competitive edge ahead of MACH 2014, the UK’s largest manufacturing technologies show.

Oil and gas supply chain companies make a significant contribution to the UK economy. The sector encompasses thousands of firms and represents a core component of the British engineering and manufacturing base. This is reflected in the growing importance placed on the sector by MACH exhibitors.

The supply chain supports the oil and gas industry across all of its requirements – from seismic acquisition of reservoir data, through exploration and appraisal drilling, field developments and production operators, to decommissioning at end of life. In the 2012 Oil Field Servies Report for the UK, published by Ernst & Young (EY), the combined activity of 390 companies was found to be providing direct employment for almost 93 000 people and generating £27 billion in revenues.

Shale gas boom

Meanwhile, the shale gas boom is seeing a number of notable British industrial companies benefit. These include pump-maker Weir Group, and Rotork, the world’s largest producer of valve actuators and control systems. Weir Group increased its involvement in the industry at the end of last year following its acquisition of Mathena, the US equipment supplier to the onshore oil and gas drilling sub-sector, while Rotork is reported to have seen a 15% increase in its order book since the turn of 2013.

Another major player, Newcastle-based flexible pipeline specialist GE Oil & Gas, was awarded £3 million recently by the Regional Growth Fund to increase its manufacturing capability and build on its leading offshore research role for liquefied natural gas (LNG) market. This is expected to create more than 120 new jobs while safeguarding 80 existing posts.

GE’s broader strategy to keep pace with the global demand for critical subsea production components has seen it invest £10.4 million in its Brent Avenue site in Montrose, Scotland. The expansion includes a new 2250 m2 assembly and test facility, which will allow for the in-house manufacturing of large, deepwater horizontal subsea trees used in the extraction of oil and gas reserves from the seabed in some of the most challenging environments across the globe. It will also lead to a significant increase in machining capacity, from 63 systems a year to more than 90, as well as in-house machining of much larger vertical tree systems.

Advanced manufacturing

2014 is set to be a bumper year for market in machine tools and related equipment with the MTA predicting solid growth over and above the levels reached in 2012 and 2013. Other aspects of manufacturing technology such as metrology (measuring) equipment and computer aided design and manufacturing systems (CAD/CAM) combine with the machines, tooling and work-holding equipment to deliver complete systems, making manufacturing technology fundamental to the nation’s economy.

Despite being ignored for some time, the innovators have continued to innovate. This has ensured Britain continues to boast truly world-class and high-value-added industries. New ways to realise design and new modes of production are changing the way products are made. Coming under the umbrella term of ‘advanced manufacturing’, we are seeing the implementation of innovative technology to improve products and processes from design, concept and prototyping, through machining of raw material to delivery of the finished product.

Much of the innovation we are seeing today in advanced manufacturing technology is around processes rather than hardware. For example, design and prototyping can now be downloaded directly to machine tools, and the manufacturing process controlled and refined remotely. This is particularly important for sectors such as oil and gas, because much of the design takes place in regional centres of excellence, with subsequent manufacture completed in low-cost markets.

At the same time, oil and gas hardware and services are being exported globally, with hubs such as Aberdeen and Newcastle acting as gateways to markets including the Gulf of Mexico, Gulf of Arabia, Indonesia and Australia. Smaller companies too are playing an essential role in driving innovation and with better access to finance and support from across the supply chain, will continue to flourish.

Maintaining the strategic edge

Recognising the economic importance of the sector, the UK government published an oil and gas strategy in the spring of 2013. Managed jointly by the Department for Business, Innovation and Skills (BIS) and the Department for Energy and Climate Change (DECC), the strategy aims to secure billions of pounds of future investment and thousands of jobs. It includes a pledge to maintain a fiscal regime encouraging investment and innovation, as well as measures to boost supply chains and tackle the engineering skills gap.

The strategy included £7 million for a new research facility known as the Neptune National Centre for Subsea and Offshore Engineering. The new facility will be based at Newcastle University and will act as a place for industry and academia to interact, providing crucial infrastructure for emerging research opportunities. The Neptune Centre will also have a strong element of developing highly-skilled graduates to help address key skill shortages.

With Britain’s industrial base now recognised as holding as important a place in the economy as sectors such as financial and professional services, the government is looking to rebalance the economy, rebuild supply chains and nurture artisan skills. One organisation tasked with furthering these objectives is the Technology Strategy Board (TSB). Working across business, academia and government to help companies take ideas through to commercialisation, the TSB is currently overseeing the creation of a network of world-leading technology and innovation centres known as ‘Catapults’.

The Catapults cover a range of sectors including High Value Manufacturing. The High Value Manufacturing Catapult is building on the strength of seven constituent institutions, one of which in particular, The University of Sheffield’s Advanced Manufacturing Research Centre (AMRC) has been a great example of collaboration between academia, industry and government.

The Catapults represent a win-win scenario, whereby Britain’s engineering and science graduates and apprentices are nurtured in a high-technology and innovative environment that will ensure they are fit-for-purpose when they enter the global economy. A prosperous high-tech UK manufacturing industry depends and thrives on a highly-skilled and knowledgeable workforce, so a strong foundation of trained staff and well-educated students will enable Britain’s manufacturing industries to maintain their competitive edge and successfully compete on the international stage.

The theme of MACH 2014 is ‘innovation in action.’ It is the UK’s largest event for Manufacturing Technologies. Over five days, more than 20 000 visitors will see some 500 exhibitors putting their latest technologies and innovations through their paces. To register for the event go to

Edited for web by Cecilia Rehn

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