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  • The North Sea: A year in review - a supplier’s perspective

    29 Mar 2019 | Trade News

    By Pete Bradshaw, Sales Manager, and Barry Rust, Marketing Manager Energy and Sustainability, Tata Steel

    As one of the largest industrial employers in the UK with a track record of supplying over 1 million tonnes of subsea pipelines to the North Sea, Tata Steel is a key stakeholder in the North Sea oil and gas market and the region’s recovery is extremely important to us.

     

    Last year was one of highs and lows for the industry as a whole. The early hopes of oil price inflation and stability did not altogether materialise, but despite this Tata Steel completed the supply of products to a number of oil and gas projects. 

     

    In the last 12 months we supported five pipeline projects in the North Sea, which is indicative of the returning optimism in the region. With the uncertainty around oil prices, this growth in the industry’s activity is a reflection of the real improvements that have been made across the board in efficiency, and an ability to operate in the current environment.

     

    The further evidence for recovery is strong, with the North Sea expecting to attract around 30% of the global subsea contract awards in 2019 and exploration activity set to increase by 25 percent. A total of 23 projects are due to be sanctioned this year alongside a number of new independent operators establishing themselves in the market.

     

    Despite a marginal increase in the average cost per barrel of oil equivalent in the UK Continental Shelf, average operating costs are still 37% lower than they were in 2014. It therefore appears the industry has captured all of the big cost savings and we are in a period of cost stability. This combined with an expected environment of price rallying, means the future could be considered bright.

     

    Despite all the other uncertainties in the market, this environment provides suppliers like Tata Steel with confidence to continue to invest in both its products and processes. 

     

    In the last year some significant investment in our steel making capability came on line; a blast furnace life extension project and direct cooling facilities in our coil mill in Port Talbot are both providing for enhanced productivity and final linepipe properties.

     

    If we look at the investment in our Hartlepool 20” pipe mill, our main linepipe mill, we have enhanced laser metrology to help our clients improve their offshore productivity as well as investments in less physical aspects such as data analytics, to drive both product capability and our understanding of performance.

     

    It’s in this area of data management and analytics that perhaps the biggest change will come in the next few years. The drive for innovative data-driven approaches will be a game changer. The key to unlocking that will be engagement, and joint development, and some of this will need to be across the complete supply chain.

     

    The five North Sea linepipe projects that Tata Steel delivered to in the past 12 months were for five different operators and included a number of additional services, from anti-corrosion coatings to sacrificial anode preparation.  And the question over the sustainability of the oil and gas industry’s recovery is also being answered - with two further project awards at the start of 2019 for Tata Steel, for both linepipe and coatings.