Economic Report 2013

Figure 39: Number of Projects per Fabrication Category Approved in 2008 to 2013

35

FPSO Steel > 20,000t Steel 4,000 - 20,000t Steel < 4,000t Subsea

30

25

20

15

10

5

0

Number of New Fabrication Projects Approved Each Year

2008

2009

2010

2011

2012

2013

Source: Oil & Gas UK, DECC and Wood Mackenzie rce: Oil & Gas UK, DECC and Wood Mackenzie

In BIS and DECC’s industrial strategy for oil and gas, referred to above, fabrication has been identified as requiring specific attention. While there are several British fabrication yards that actively tender for substantial offshore projects, a number of recent major fabrication contracts havebeenawarded tooverseas yards that are apparently more competitive than those at home. The government is working with the industry, without compromising the competitiveness of projects, to ensure that fabricators in this country are given every opportunity to bid for all UKCS contracts. The development and production of oil and gas from the UKCS has a history of great technical innovation to find and develop a wide variety of oil and gas reservoirs in varying water depths, often with a high degree of geological uncertainty and in demanding maritime conditions. Technology

Historically, much of the research and development (R&D) has taken place within the international oil companies (IOCs) and larger service companies who have significant R&D capability. The government’s 2010 scoreboard showed that, of the top 1,000 UK companies investing in R&D, 16 invested some £1.2 billion in oil and gas R&D in this country. Meanwhile, direct government funding of R&D for the oil and gas industry has been fairly low (about £7 million between 2006 and 2011) with no thematic oil and gas research area within Research Councils UK 14 . The majority of research council funding has been indirect via projects in areas of relevant science (such as advancedmaterials) and other related subjects (such as carbon capture and storage). This has raised the total of £7 million mentioned above to nearer £10 million between 2006 and 2011, or about two per cent of the total public sector funding of energy research.

14 See http://www.rcuk.ac.uk/Pages/Home.aspx

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ECONOMIC REPORT 2013