2015-09-14 18:35:00
BRITAIN'S WORST DOWNTURN
Britain's oil and gas platform builders are facing their worst downturn in orders for 25 years, threatening thousands of jobs across the UK.
The postponement of many North Sea projects due to the fall in the oil price during the past year has left fabricators competing for a dwindling amount of work as their current order books wind down.
"It's very difficult to see where the next opportunities are going to come from," said Terry Savage, chairman of the UK Fabricators Forum.
The situation is the worst since the late 1980s, he said. "The industry is obviously suffering and the fabrication sector by its nature is suffering particularly."
Fabricators build the superstructure and legs of oil and gas platforms, as well as carrying out work on other structures and vessels, and employ about 10,000 people in the UK, with a further 10,000 in the supply chain.
The impact of the low oil price has been compounded by the strength of sterling, with the current exchange rate exacerbating the difficulty for UK-based fabricators of bidding for work in more distant markets.
In the north-east, OGN on the Tyne is completing the last contract in its order book, leaving the jobs of 1,300 people under threat. It is now focused on securing work on offshore renewables and carbon capture and storage but these sectors too are prone to delays and political uncertainty.
OGN has urged the government to try to ensure that more North Sea oil and gas investment, which is supported by UK tax concessions, comes to British companies. It believes the government could do more, without breaching EU regulations, to press the case for the UK's domestic industry.
British yards are now focused on securing work on two North Sea projects: Maersk Oil's £3bn Culzean gas plan and Chevron's Captain Enhanced Oil Recovery scheme.
Maersk has said 15-20 per cent of Culzean's work will be carried out in the UK, while Chevron said it had shortlisted four fabricators, two of them with UK facilities.
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