Economic Report 2013

Fabrication

The future prospects of the subsea sector are positive and, if companies’ growth forecasts are achieved, over £11 billion of revenues could be achieved by 2016. Future growth in exports is anticipated to come primarily from North and South America and Asia. The state of the well services’ sector is a good indicator of current and future activity on the UKCS, because of its involvement in the exploration for and appraisal and development of oil and gas reservoirs. In 2012, companies delivering drilling, completion, testing and maintenance services for oil and gas wells generated the highest gross revenue since records began in 1996, at £1.9 billion. This higher than expected revenue can be attributed to the growing number of technically complex wells which require the specialist skills and knowledge of well services’ contractors. This success has in turn boosted employment, as the number of highly skilled jobs in the UK supported by the sector also rose by ten per cent in 2012 to 13,000, including 2,200 graduate engineers and 1,700 technicians. The sector’s future prospects are good with companies forecasting a further five per cent increase in revenues in 2013. Technical innovation is a priority for well services’ contractors with some companies spending up to 90 per cent of their annual capital investment on developing new technologies. Indeed, their overall investment in future capacity increased by 20 per cent in 2012 to £111 million, half of which was in capital equipment, the other half in new technology. Well Services

Since the discovery of oil and gas on the UKCS more than 40 years ago, the industry has developed an indigenous fabrication supply chain with expertise in the design and construction of offshore platforms and a broad range of associated structures. Britain’s fabricators have been involved in much of the construction of around 6.5 million tonnes of concrete and steel structures installed on the UKCS to date. The sector has demonstrated it has the capacity to design and fabricate: • Jackets (the steel substructures which support platforms) • Decks and modules comprising the topsides facilities (above the jackets), such as drilling, production, process, utilities and accommodation units • Flare booms and towers • Subsea manifolds and pipeline bundles While the requirement for very large, integrated offshore platforms is no longer as it was in the 1970s, 1980s and 1990s, there still remains substantial demand for fabrication services, especially associated with fields developed as subsea tie-backs to existing production platforms. The existing infrastructure often requires modification and upgrading to accommodate new flows of oil and/or gas (55 per cent of fields approved in the last five years have been or will be developed as subsea tie-backs). An illustration of a pair of bridge linked, offshore platforms is depicted in Figure 37 overleaf (note that it is not unusual for all the topsides facilities to be accommodated in a single, integrated platform).

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ECONOMIC REPORT 2013

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