Offshore Energies
UK’s 2025 Supply Chain report says building on the UK’s
unique industrial strengths in energy production is key to unlocking the
Government’s ambition to grow the nation’s economy and build the future of the
North Sea.
Drawing on over 50 years of successful North
Sea oil and gas operations, the offshore energy industry’s supply chain has the
potential to power the UK’s drive to produce secure, sustainable and ever
cleaner energy.
But without a pipeline of projects enabled by pragmatic policy
to anchor them here in the UK, OEUK’s sentiment survey reveals nine companies
out of every 10 see more attractive opportunities to grow their business
overseas due to uncertainty and a less positive business environment at home.
The report sets out the barriers the industry
faces including low revenues from renewables and declining investor confidence
while outlining the actions both industry and government can take to ensure a
homegrown energy future. It sets out key steps industry and government can take
to anchor world class offshore energy companies in the UK.
These include
industry initiatives aimed at fostering better collaboration across the supply
chain plus moves to ensure that government champions the UK energy supply chain
capability in offshore wind, hydrogen, and carbon capture and storage (CCS).
Forming an extensive and vital network across
the country from Shetland to Southampton and from Morecambe Bay to the Eastern
Seaboard of England, the UK’s offshore energy supply chain comprises hundreds
of businesses supporting the industry throughout its lifecycle.
As an
integrated ecosystem, this supply chain delivers products and services to
energy producers and includes FTSE 100 companies as well as small to medium
enterprises developing new technologies and providing specialist capabilities.
It encompasses companies involved in designing mooring systems, manufacturing
specialist valves, installing high voltage subsea cables, maintaining pipelines
transporting energy and carbon plus those skilled at removing offshore
structures from the seabed with many developing global leadership in floating
offshore wind and decommissioning.
Katy Heidenreich, OEUK’s supply
chain and people director, says: “The UK is competing internationally for energy
investment so it’s concerning that many offshore energy supply chain firms see
more attractive opportunities to grow their business overseas. We’ve set out
key steps industry and government can take to position the UK as first choice
for the offshore energy supply chain companies.
“To grow the whole UK’s economy, we need energy
policy that supports continued investment in homegrown oil and gas alongside an
acceleration of renewable energy. This must be addressed, and we are working
with our members to bring positive solutions to the table.
“It’s good to export our expertise but that
should never come at a cost to work we need to get done in the UK. Around 60%
of companies surveyed for the report are diversifying into offshore wind,
hydrogen and carbon capture and storage but business revenues from renewables
and CCS still represent a relatively low proportion as they make up between
zero and a fifth of their turnover.
“OEUK is currently engaging with critical
government consultations on the future of our North Sea from industrial
strategy to oil and gas licensing, environmental impact and a new fiscal
regime. It’s vital we get this right to create a positive business environment
in the UK for our supply chain.
“The offshore energies industry supports the
sectors Britain needs to build its future. Steel, cement, ship building, glass,
car making and many more rely on the energy and technologies we produce,
including carbon capture which can offset and futureproof their
energy-intensive operations. With between 60-80% of the capabilities
required to lead the energy transition to net zero emissions, our companies and
highly skilled people are committed partners in delivering secure, and
affordable homegrown energy.
“The UK government is rightly ambitious to develop the clean power capabilities
to support its industrial strategy, but this goal must be delivered in a way
that builds our supply chain capability. The prize is a homegrown energy
future, not one that is imported.”
Current challenges highlighted by the OEUK’s
report include harnessing oil and gas revenues from the UK’s still significant
reserves so supply chain companies can survive and thrive.
The report outlines how initiatives including
alliance contracting, shared inventory systems and a drive to promote good
procurement practice, are supporting efforts to create an attractive commercial
environment. These are helping operators, developers, major contractors and
suppliers of all sizes work better together.
OEUK’s report comes as decisions made in the coming months will not only shape
the North Sea’s future but also its ability to unlock investment in low carbon
technologies while continuing to deliver the energy security the UK needs. It
highlights that there must be collective recognition that a sustainable future
is one that enables companies to remain anchored in the UK while adapting and
growing as new energy opportunities arise.