Subsea report and invitation to workshops

A report highlighting opportunities for Scottish companies in the booming global subsea industry has just been published by the Scottish Enterprise energy team, predicting continued major growth in the next four years. The news is particularly good for Scottish companies which are already world leaders in technology, supply and operations, providing over 50% of the world’s subsea industry goods and services.

The report was commissioned from industry analysts Douglas-Westwood, and its main findings were unveiled at SubSea UK 2007 in Aberdeen, which is Europe’s biggest forum in the subsea oil and gas sector.

The report expects subsea revenue to increase from the current level of £15 billion to over £20 billion by 2011 with the most significant growth area being Africa, the world’s largest subsea market, including Angola, Nigeria and Egypt. It is forecast to double to £6 billion in the next four years with Asia and Latin America, in particular the Gulf of Mexico and Brazil, also expected to see major expansion over the same period.

Growth sectors include providers of hardware and deepwater installation vessels which are already struggling to meet demand, while on the non-pipeline side, drilling and completion are set to see an increase of 45%, from just over £8 billion to over £14 billion.

Riding the subsea wave

The numbers of global subsea well installations have also steadily increased from around 200 in 2004 to the current level of around 300 and are predicted to increase by a further 500 units by 2011. Scotland is also a major player in the ROVs (remotely operated vehicles) sector which is expected to double over the next five years.

Brian Nixon, energy director of Scottish Enterprise is positive about the prospects for Scottish companies: “The oil and gas industry is booming with unprecedented levels of business and optimism and the subsea sector is riding that wave. Scotland and the UK’s oil and gas sector is better placed than any other supply chain in the rest of the world to play into that market, particularly so for subsea specialists.

“The unique expertise that lies here is recognised worldwide and represents a huge opportunity. We want to work with industry to make sure that upward trend continues for the good of the Scottish economy.”

As well as pointing out the areas of predicted economic growth, however, the report highlights potential barriers to business which newer companies may experience. These include corruption, security, culture, language and market access. Brian Nixon hopes that the research will enable especially younger companies to “identify high-risk markets” adding that “We very much hope that this research will help companies to avoid mistakes. It is a very costly mistake if you are six or 12 months down the international business development route and suddenly discover, for whatever reason, that you are chasing the wrong market.”

North-east subsea businesses have welcomed the report. Ciaran O’Donnell, chief executive of Aberdeen-based CSL Group, one of the world’s fastest developing subsea companies said “We have the subsea heritage and know-how here in the North Sea and we must make sure we maintain our position as a subsea centre of excellence as the opportunities overseas continue to grow.”

The research is the first in a series of similar reports on the oil and gas sector and follows on from dissemination workshops being run by the Scottish Enterprise energy team. Anyone interested in attending future workshops aimed at helping Scottish companies exploit opportunities and win business in the sector should email Lindsey.Burnett@scotent.co.uk