A snapshot survey by industry body, Subsea UK, has revealed that, while sales have dropped since the oil price collapse, the UK’s subsea industry is maintaining its investment in technology and looking to increase exports.
Around 90% of respondents have seen sales decrease in the last 18 months. Of those, 28% saw sales drop by 30-40% and a further 28% have lost half their revenues with sales decreasing by 50% or more. Almost 6% reported no impact on sales and almost 4% have seen an increase in revenues. Around 80% felt that the financial institutions have lost faith in the sector. However, only 5.7% were looking to refinance and 7.7% are actively seeking new investment.
Almost 70% of companies surveyed were not actively recruiting and 28% were recruiting less people than they were in 2015. More than 20% of respondents said that they were still employing apprentices to support their business, however recruitment on the whole has dropped, with only 8% of companies reporting that they are looking to employ more people than they were 12 months ago.
Underwater technology, systems and processes have been helping recover more hydrocarbons from the North Sea since the eighties. The skills and expertise honed in the UK have led to the creation of a GBP 9 billion industry which employs around 50,000 across the country. Subsea UK’s 300-strong membership, which represents the majority of the subsea companies in the supply chain, were surveyed to provide evidence-based insight into the impact of the oil and gas downturn.
Subsea UK chief executive, Neil Gordon, says, “The decline in oil price and subsequent industry-wide downturn has seen a massive reduction in CAPEX and OPEX budgets worldwide which have impacted on the subsea sector where we are seeing job losses and the collapse of companies, putting the UK sector’s enviable world-leading position under threat. The findings from our survey underline the negative impact on revenues and recruitment but they also reveal positive signs of the sector adjusting and adapting to the lower for longer oil price environment which will ensure we are well-placed for the future.”
Some 80% of respondents hope to drive growth by increasing overseas sales and exploring new markets with a focus on the Asia, the Middle-east, North America and Africa. Other countries of interest are Australia, China, Brazil and Norway.
Mr Gordon says, “Thankfully our survey shows that subsea companies are increasing their export efforts, exploring new geographic markets where their services and technology are in demand.”
More than 44% of respondents said that the lower for longer oil price environment has led to the industry becoming more receptive to new ways of working and adopting different techniques and innovations.
Almost 80% of respondents are still investing in new technology and see this as an area of focus in the long-term to secure future growth.
Mr Gordon adds, “The industry is more receptive to new ways of working and new technologies and we are starting to see the benefits of real collaboration towards reducing costs and driving efficiencies. It is encouraging that, against this backdrop, subsea companies are continuing to invest in the development of new technology.”