North East of England fabricators reset sights for global work

Facing an uncertain future

Aug 1st, 1999

Roughly 80% of the topside production facilities installed in the UK North Sea were built in the North East of England at yards either on the River Tyne or the Tees - 800,000 tons in total since the offshore industry took off in the UK around 30 years ago.

With over 30,000 people still involved in the industry onshore and another 7,500 offshore, the region can justifiably claim to be one of the principal oil and gas centers in North West Europe. But with dwindling orders for new production platforms in the North Sea, the area is having to work hard to retain its status in the industry.

When the Shearwater topsides leaves Amec's Wallsend yard next March, it will represent a milestone. The project provided valuable work not only for Amec, but for Heerema in Hartlepool and Odebrecht in Middlesborough.

Frankly, the prospects of replacing these contracts with the same level of new work are not that good in the short term, given the current climate in the industry and the maturing status of the North Sea.

Some consolidation

Simon Naylor, Amec director for business development, believes some consolidation of the fabrication industry along the UK east coast is inevitable. At the same time, he retains a confident outlook. Accepting that the total number of jobs in the UK industry is likely to fall, he strongly believes the expertise that his company has built up in fabrication management and delivery is highly exportable. "Amec sees the UK operation providing the base for its fabrication activities all around the world," he claims.

Heerema's Sales and Marketing Manager in Hartlepool, Peter Self, is also positive. His facilities are much smaller than Amec's and he sees the company servicing a niche market for the type of "smaller processing modules" that will be required on the numerous existing platforms in the North Sea in order to maintain and enhance production over the next several years.

Shearwater sailaway

The Shearwater sailaway will be used to provide a showcase for the offshore industry, particularly in the North East of England. Ken Bateson, Shell's External Affairs Manager on the Shearwater project, is coordinating an initiative backed by local development councils, the UK government and the Northern Offshore Federation to demonstrate that the region can compete on the world stage.

An exhibition is also planned at Amec's Wallsend yard to include other leading oil and gas contractors and suppliers. A key element of the message will be the value that can be extracted from the well-established supply chain that exists in the region.

Another initiative, being pursued by the Newcastle City Council in partnership with Shepherd Offshore Services, is the Newcastle Offshore Supply Base at Walker just outside the city center. Developed on the site of former naval dockyards with £3 million funding from the UK Government and the European Community, the facility on the River Tyne boasts one of the best equipped quays on the UK's North Sea coast.

Newcastle base

Stretching for approximately 800 meters, the quay offers berthing with a minimum 8 meters of water depth and excellent lifting capability. A feature of the development is one of the few remaining "hammerhead" cranes in the UK, actually first commissioned in 1931, which is capable of handling up to 250-ton loads.

Lesley Alderman, economic development officer with the Council said: "The quay obviously provides engineering companies with first-class river access. But we are trying to achieve more than this. We are encouraging engineering and service companies to "cluster" around the development thus forming a cohesive and complete offshore and marine industry base.

With customers, contractors, and suppliers together in a dynamic environment, we hope to foster supply chain relationships and promote the research and development necessary to keep the industry in this area, as well as the UK as a whole, competitive."

According to Brian Hines of Shepherd Offshore Services, who manages the quay, the development enjoys excellent transport links, highly developed infrastructure, good support services and a very flexible workforce.

To demonstrate this, he cited the work done to refit Rockwater's Semi 1 diving and offshore construction support vessel prior to its mobilization to the Gulf of Mexico earlier this year. The removal of a diving system and addition of extra accommodation coincided with the Christmas and New Year holiday period but was completed on time and without difficulty.

Wellstream and Duco, leading producers of flexible flowline and umbilical respectively, have new factories adjoining the quay and have provided the core of the business so far. Slowly, however, other companies are beginning to use the facility, raising hopes for the future of the development. Already there are plans to extend the quay at its seaward end.

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