Search

Norfolk and Suffolk’s smaller oil and gas firms can be key in sector’s resurgence

PUBLISHED: 08:41 01 November 2017 | UPDATED: 09:58 01 November 2017

An oil rig in the North Sea as experts say firms which are agile can take advantage of gaps in the oil and gas sector. Picture: Danny Lawson/PA Wire

An oil rig in the North Sea as experts say firms which are agile can take advantage of gaps in the oil and gas sector. Picture: Danny Lawson/PA Wire

Archant

The agility and adaptability of smaller operators is underpinning a recovery of confidence in East Anglia’s oil and gas industry, say sector experts.

Mark Routh, chief executive of Independent Oil & Gas. Picture: IOG. Mark Routh, chief executive of Independent Oil & Gas. Picture: IOG.

They point to a crop of leaner firms, working on a smaller scale, emerging to take the place of larger operators with higher overheads, who see less value in the mature basin of the Southern North Sea (SNS) amid continuing low oil prices.

It comes just days after a major report from Oil and Gas UK showed the green shoots of confidence in the industry nationally, with 60% of employers expecting a rise in recruitment next year.

North sea production company Independent Oil and Gas has been able to secure three satellite hubs at fields in the SNS and earlier this year purchased a decommissioned gas pipeline for £1 to bring the fuel ashore at Bacton in Norfolk.

The firm put forward its field development plan yesterday and has announced Offshore Design Engineering will be a key contractor for the project from its Great Yarmouth base.

Simon Gray, chief executive of the East of England Energy Group (EEEGR). Picture: DENISE BRADLEY Simon Gray, chief executive of the East of England Energy Group (EEEGR). Picture: DENISE BRADLEY

David Rowan, managing director at offshore personnel firm Epic International, said there was a step-change taking place with major businesses now looking to smaller firms to fulfil their needs. He said: “What we are seeing now is opportunities for larger companies are coming to the smaller players.

“Businesses that would not have dealt with us before now are dealing with us, and we are seeing some projects broken up between two or three smaller firms to fit their specialisms.

“They are looking to companies which don’t have a huge structure or shareholders to satisfy, so can keep the price down.”

Mr Rowan said bigger companies had cut their cloth according to the $50 a barrel oil price and said the industry had “come full circle” with lower operating costs sparking a resurgence in drilling globally.

Simon Gray, chief executive of the East of England Energy Group, said the region’s smaller supply-chain companies were poised to benefit. “Big operators like Shell and BP will be looking for massive developments globally and small reserves like the SNS, a very mature basin, have not got the scale that can sustain them. Smaller businesses can capitalise on these and I think increasingly we will see that happening.”

A change in the industry

David Rowan, managing director at Epic International which provides technical, maintenance and project management personnel for the sector, said he thought there was a step change taking place with major businesses now looking to smaller firms to fulfil their needs.

He said: “What we are seeing now is opportunities for larger companies are coming to the smaller players.

“Businesses that would not have dealt with us before now are dealing with us, and we are seeing some projects broken up between two or three smaller firms to fit their specialisms.

“They are looking to companies which don’t carry the burden of a huge structure or have to satisfy shareholders so can keep the price down.”

Mr Rowan said bigger companies had cut their cloth according to the $50 per barrel oil price and said the lowering of operational costs appeared to have sparked a resurgence in drilling internationally.

“It comes full circle,” he said, “if we can cut the operational costs then it becomes more likely they can make a project operational.”

Growing business

Norwich-based Sitek Engineering has benefitted from the upturn in the sector, winning contracts to upgrade helipads on rigs and taking on more than 45 additional contractors.

The firm, which has a turnover of around £4m now employs in the region of 80 staff with the bulk of those offshore workers.

General manager Glynn White, who joined the company four months ago, said the firm’s flexibility had helped it to find work.

He said: “Because we are a small firm we are able to move quickly, we can get personnel offshore within a day of getting a call.

“We have our own training in-house so if we have an electrician who needs offshore qualifications we can get it done and get him out there the next day.”

Mr White said backroom processes, including electronic systems for logging and managing workloads, meant the firm was able to operate with lower costs making it more competitive for tenders.

Other News

42 minutes ago

A woman has been arrested on the suspicion of drug-driving and possession of a class A drug after the car she was believed to be driving crashed into a home in Gorleston.

10:17

A 33-year-old man has been arrested after a car was stolen from a garage and later left by the side of the A149 in Catfield.

Young actors and singers are being offered the chance to sample the fun of taking part in a famous rock opera.

For 40 years Bubbly Bingo the clown brightened up the lives of children and families across Norfolk with his pranks, comedy stunts and tricks.

Most Read

Yesterday, 15:48

A teacher is feeling a new woman and enjoying time with her children after she lost more than four stone in 26 weeks.

Read more
Yesterday, 11:11

A decision to close a Great Yarmouth bridge due to reports that a child may have gone into a river has been criticized by a councillor.

Read more
Mick Castle
Yesterday, 16:15

Major roadworks at one of the main gateways into Great Yarmouth are due to end next week after four months of traffic disruption.

Read more
Norfolk County Council
Yesterday, 09:40

The A47 in Great Yarmouth was blocked after a car had to stop suddenly because of mechanical problems.

Read more
Norfolk Police
Yesterday, 12:43

A qualified snooker coach has applied to build a new hall in Gorleston, with the aim of one day helping youngsters make their big break in the game.

Read more

Local Weather

Partly Cloudy

Partly Cloudy

max temp: 4°C

min temp: -0°C

Show Job Lists

Digital Edition

cover

Enjoy the Great
Yarmouth Mercury

e-edition today

Subscribe

Newsletter Sign Up

Sign up to receive our regular email newsletter