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UK not realising offshore potential

Oilfield Technology,

Alistair Birnie, the chief executive of Subsea UK has delivered a broadside to the UK subsea community ahead of the European Future Energy Forum, an offshoot of the World Future Energy Summit, which runs from 19th – 21st October in London Docklands.

Though the UK renewable energy sector is considered a world leader in offshore wind technology, it is apparent that it is not necessarily a world leader in offshore wind technology, but is rather more reliant on foreign companies providing technology and know-how, this mirrors the early development of the UK’s oil and gas exploration industry.

Success in the early days of oil and gas was by no means certain. The offshore oil industry was driven by a strong American influence and most jobs were low-grade aboard rigs or in construction yards. The safety culture was poor with cost being a priority, explained Mr Birnie.

“We were set on a path of short-term insecure future, exploited and driven by overseas influence. But that changed in the seventies when UK companies with a better understanding of specific needs, unique to the North Sea, emerged. This spurred on a generation of rapid evolution and investment to build an innovative and efficient capability that was also competitive. We are now recognised as having the strongest capability anywhere in the world as a hub for both project execution and technology excellence.”

The UK’s subsea sector, which now employs around 40,000 and generates £5 billion to the economy, started to emerge in the late seventies and now leads the way around the world.

“Our vision of building a knowledge base that would create value on a global scale, centred in the UK was what drove this change,” said Mr Birnie. “If we look at West Africa, North America, Brazil, Asia Pacific, India and even Russia, we see huge UK influence in engineering, construction, installation and maintenance with UK companies trading at a premium because of their track-record and capability.

“The common driver is knowledge and the application of this knowledge to deliver solutions with which others cannot compete. The construction element or products are not the drivers of our exports but the application of knowledge is.

“Even today when the North Sea is still very active, exports are outstripping domestic output and growth continues year on year. As long as we keep investing in the development of new knowledge, we will retain our world-leading position.

Mr Birnie is concerned that, despite significant government and industry activity in terms of positioning the UK to become a world leader in sustainable energy sources, particularly in marine renewable, there are echoes of the early strategies for oil and gas which produced low grade, construction oriented jobs.

“Why would we wind the clock back to when we invested in low added value operations when we can position ourselves as the world experts in offshore energy? We need to look at the long-term and establish how we can become the dominant player in markets that are beyond reach for fabrication or which increasingly have highly demanding local content constraints.

UK subsea companies deliver around 30% of global subsea activity. Subsea UK believes this happened because the pioneers had a clear understanding of how application of vital knowledge would be the main differentiator.

The subsea sector is now arguably playing an even more vital role in renewable energy with some 30% - 40% of capital cost attributable to subsea and marine operations for offshore wind and an even greater percentage for marine energy.

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