ECONOMIC REPORT 2013
52
and activities associated with increasing oil
recovery. Given the ageing infrastructure
present on the UKCS and the number of
brownfield projects, it is not surprising to see
such a rise in revenues from operations.
Revenues in exploration and production
drilling grew slightly in 2011, but overall its
market share in the UK has been decreasing.
Revenues are consistently lower than those
seen in the equivalent Norwegian sector, but
costs in Norway are also consistently higher.
Reservoir and seismic is a growing sector
in the UK, but from a relatively small base.
Profitability fell by 54 per cent in 2010, which
was probably caused by the six month drilling
moratorium in the Gulf of Mexico (GoM)
between May and November, releasing spare
seismic vessels from the GoM to the UKCS
and depressing day rates. The supply of these
vessels in the UK tightened in 2011 after the
moratorium in the GoM was lifted, helping
both revenues and profits to recover in 2011.
Scottish Council for Development and
Industry’s Report – Exports
The Scottish Council for Development and
Industry’s
2011-12 Survey of International
Activity in Scotland’s Oil and Gas Sector
12
indicates that the Scottish supply chain’s
revenues totalled £17.2 billion in 2011, growing
by 5.8 per cent from 2010. International sales
increased by 8.4 per cent to £8.2 billion in
2011, with North America remaining the main
export market. Scottish exports to Norway,
Angola, Nigeria and the UAE are also strong.
Subsea Engineering
A particular strength of the UK’s supply
chain is subsea engineering which generates
£8.9 billion in revenue for the economy
according to Subsea UK
13
. Subsea technology
has become increasingly important, both in
producing oil and gas reserves from the UKCS
and in expanding exports.
More than 800 companies are active in the
UK’s subsea sector, with SMEs making up
the largest proportion. Of that total number,
seven per cent each generate more than
£100 million of turnover a year, with the
median turnover being £2.6 million. The
36 largest companies and their subsidiaries
produce 70 per cent of subsea turnover in the
UK and 77 per cent of the sector’s total output.
The companies involved are spread across
the country, although three quarters of the
total revenue is generated in the north-east of
Scotland (£6.7 billion). Around £614 million of
output is concentrated in the east of England
and £400 million and £126 million in the
north-east and south-east of England,
respectively. The remainder is spread across the
east Midlands, the north-west and south-west of
England, Wales and the rest of Scotland.
The export of subsea goods and services from
the UK is valued at £4.4 billion. Key markets are
Norway, West Africa, North America and Asia.
Engineering and manufacturing companies
generate a substantial share of this revenue, as
do service providers in disciplines such as diving,
remotelyoperatedvehicleinspection,underwater
construction, installation and surveying.
On the back of this strong performance,
16,000 new jobs have been created since 2010,
bringing the total number of people directly
employed in the subsea sector to 53,000,
with another 13,000 employed indirectly.
Engineering, construction and diving roles
account for 48 per cent of the workforce, with
manufacturing accounting for 19 per cent of
the total.
12
See
13
See
