UK’s Subsea Sector to Boost Exports in 2017
British subsea companies are expecting to increase overseas activity in the next 12 months, according to a survey conducted by industry body, Subsea UK.
Of the 300 member companies surveyed, 27% are predicting increasing exports by 50% or more in 2017. More than half (56%) expect overseas sales to increase between 1% and 49% with only 17% not expecting any increase in export revenues.
A third of companies surveyed do not yet know what effect Brexit will have on their export plans, with 49% believing that it will have no impact on their plans.
By comparison, 32% expect domestic revenues to remain static in 2017 while 22% are anticipating a decline in domestic sales. Of those who expect domestic revenues to increase, the majority are forecasting between 10% and 30% additional revenues from the UK Continental Shelf.
Export sales currently account for over half or more of the annual turnover of 32% of respondents with 55% seeing less than half of their turnover attributed to exports and only 13% with no export revenues.
The majority of export sales are related to oil and gas however, 58% of respondents are also exporting to the renewables industry (33% in offshore wind and 19% in tidal). A quarter of respondents export to the defence sector, 22% to subsea mining and 18% to ocean science.
Subsea UK chief executive, Neil Gordon, said: “The subsea industry remains a British export success story. These findings underline the global demand for UK subsea engineering, technology and services and the fact that our enterprising companies are increasing their export efforts in a bid to reduce the reliance on the mature North Sea. It is no surprise that the majority of growth will come from diversification, both into other sectors and other geographies.
“However, companies must strive to maintain their market share in the North Sea where the focus on subsea tie-backs, squeezing more out of older assets and late life extension presents opportunities for subsea.”
So-called “small pools” of hydrocarbons in the North Sea will also be a significant prize that will help achieve MER (Maximising Economic Recovery) of the UK’s Oil & Gas reserves, says Mr Gordon. The technologies, methodologies and experience gained in unlocking these pools will be highly exportable.
“The potential on our doorstep is important but we have to react and adapt to the greater, longer-term opportunities that lie in international waters. And our findings reveal that our subsea companies are doing just that.”
According to the survey, the United States is the largest export market for UK subsea companies, followed by West Africa, then South-east Asia, Australia and South America. However, a third of respondents are also exporting to Mexico, China, India and Russia.
The picture changes slightly for 2018 and beyond when companies are looking to increase exports to West Africa, South-east Asia and the Middle-east.
When asked what support they receive from government and economic development agencies, 49% of respondents answered none while 32% receive support, ranging from market intelligence and advice to trade missions, grants and support.
More than a third made positive comments about the support they receive from Subsea UK but would like to see increased support from agencies such as the Department for International Trade and Scottish Development International in the form of more subsidies for trade missions, more targeted advice and intelligence and less red tape in accessing grants or funding.
Source: Subsea UK