Alistair Birnie, chief executive of Subsea UK, will be in the House of Commons today to encourage the government to show greater support for the sector that contributes £5 billion to the economy and supports 40,000 jobs. Subsea UK is a self-sustaining body that champions the UK subsea supply chain, representing over 200 members. It acts as a focal point for all stakeholders to promote the sector and maximise its opportunities at home and abroad and provides a national forum for collaboration, diversification and technology development.
He is leading a delegation of subsea businesses from across the country to the House of Commons to inform MPs of the economic importance of the sector and the need for decisive government action
Speaking from Westminster, Mr Birnie said, “The subsea sector is a substantial revenue generator but it must be at the heart of the Government’s energy strategy. The price of ignoring this valuable sector which is involved in all forms of offshore energy and at the heart of the growth in oil and gas exports and renewable energy will be too high to pay in terms of loss of revenue and jobs to UK Plc.”
Subsea represents 43% of oil and gas production, which generated some £12 billion in tax revenues in 2008/9. This percentage is growing year on year with 70% of new production attributed to subsea. Despite fluctuations in the oil price and the impact of the downturn, tax revenues from oil and gas are forecast to be £8.4 billion in this year.
“It is therefore clear that subsea increasingly enables these revenues and the balance is shifting offshore. Far from diminishing, the subsea oil and gas sector is rapidly growing, fuelled by industry needs and demand. Combine this with Scottish & Southern Energy’s estimates of 38% of offshore wind expenditure being subsea and the sector becomes even more strategically central to energy policy,” said Birnie.
Oil and gas and marine renewable activities are both gaining pace and we could be approaching crunch time for the subsea sector with people, equipment and vessel shortages. This strategic resource must be adequately supported as part of the Government’s core energy strategy through skills and technology development at national and regional levels.
International exports account for around 50% of the UK’s subsea output. Companies exporting to the major oil and gas provinces around the world must continue to receive support if an international oil and gas industry is to be anchored in the UK for the long-term.
Birnie added, “References to removing support for “dirty fossil fuel” in the Government’s energy policy are alarming and we will be seeking reassurance that our exporters will be assisted and the application of oil and gas expertise into renewables will be championed.”
The subsea sector operates and employs people at a national level with investment stretching from Inverness and Aberdeen, through Newcastle and Sunderland, Yarmouth, to the South coast and beyond.