Energy - Renewable & Offshore

SPECIAL REPORT: ENERGY – RENEWABLE AND OFFSHORE POWER GAME How the region can lead the way in 2014 GOING GLOBAL Opportunites arising from new markets OUTER LIMITS Offshore champion pushes the boundaries

CONTENTS

CONTACTS

04 NEWS

ROOM501 LTD Christopher March Managing Director e: chris@room501.co.uk Bryan Hoare Director e: bryan@room501.co.uk

The latest stories affecting the renewable and offshore industries

10 OVERVIEW

EDITORIAL Andrew Mernin e: andrew@room501.co.uk

Opportunity knocks for firms able to diversify and think globally

12 BRIGHT OUTLOOK 2014 could be a pivotal year for the sector, says Energy team head

18 GOING GLOBAL A look at the emerging markets that present opportunities to North firms

22 PAYBACK TIME The businessman who is set to reap the rewards of his investment

34 THE OUTER LIMITS Pioneering offshore suppliers pushing the boundaries of what is possible

38 PROBLEM SOLVED How an innovative North firm left US engineers slack-jawed in admiration

42 PERFECT PARTNERS A collaboration between industry and academia is beginning to pay off

MISSION POSSIBLE – NORTH LEADS WAY

28 ENERGY - RENEWABLE AND OFFSHORE

SPECIAL REPORT:

ENERGY – RENEWABLE AND OFFSHORE

WELCOME The global push to access harder-to-reach fuel reserves – and drive increased efficiencies from renewable sources – is playing into the hands of the North East economy.

Location, a rich history in engineering and an abundance of university-driven technological endeavour continue to lure big opportunities into the region. SMEs in the supply chain, particularly in the subsea sector, are playing an important role in exploration and extraction projects across the globe.

Meanwhile, a number of larger enterprises, profiled in this publication, are helping to grow the critical mass of offshore expertise supporting jobs and generating wealth from the Tyne to the Tees. This year could prove pivotal for the North East as markets recover and funding flows more readily once more.

To fully capitalise on the potential work heading the region’s way, however, challenges must be managed carefully and collaboration plus support from government will be required.

Skills shortages continue to threaten booming order books and other concerns exist around finance, infrastructure and legislation.

But as you’ll see in the following pages there are plenty of reasons to be optimistic that the energy sector can continue to increase its positive influence on the regional economy this year and beyond. in association with

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Green power station uses waste food, offshore supplier’s turnover set to soar, training contract will boost subsea sector growth, energy firm examines shale gas viability, Amec lands £255m contract in Kuwait >> One deck

L – R: Ian Bainbridge, Director, Emerald Biogas, Janet Street Porter, Adam Warren, Director, Emerald Biogas, Antony Warren, Director, Emerald Biogas and Jayne Winter, RDPE Area Manager (North East) at the Emerald Biogas AD facility in Newton Aycliffe.

>> Food for thought as leftovers power 2,000 homes An £8m green power station - the region’s first commercial food waste anaerobic digestion, AD, plant - which will generate energy to power 2,000 homes, is now up and running in County Durham.

Operated by Emerald Biogas, the facility based at Newton Aycliffe Industrial Estate, will serve the North East’s need to recycle food waste and create renewable energy, processing 50,000 tonnes of leftover food from businesses across the region, including Vale of Mowbray, Greencore and SK Chilled Foods At a launch event, hosted by broadcaster and writer Janet Street-Porter, more than 100 guests, from local authorities and national businesses, to schools and the mayors of Darlington and Great Aycliffe celebrated the launch of the biogas facility.

Adam Warren, director, Emerald Biogas, said: “Food waste is a major concern for the North East, where 800,000 tonnes is generated every year and as part of today’s celebratory launch I am delighted that we as a company are playing a valuable role and providing a long term regional solution to this national problem.

“As part of our commitment to reducing food waste to landfill and creating green energy, we also launched a campaign for schools across the region and are inviting pupils to become waste warriors, with school and site visits, educational activities and a poster competition as part of the initiative.”

Formed in 2009, Emerald Biogas is owned by three partners - Antony and Adam Warren, owners of established food and animal by-products recycling business, John Warren ABP and Ian Bainbridge of diverse farming, land and resource management company, Agricore.

The funding for the project was made available through the Rural Development Programme for England, which is jointly funded by Defra and the European Union.

Funding was also secured through HSBC. HSBC’s Tyne Tees Commercial Centre supported the Emerald Biogas project via a £3.6m funding package.

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County Durham-based Tekmar Energy has been awarded a contract with contractor Van Oord Offshore Wind Projects BV for work on the 43-turbine Eneco Luchterduinen offshore wind farm development in Holland.

The Newton Aycliffe-headquartered company will supply its cable protection systems for the project, located around 23 kilometres from the Dutch coast in Block Q10 of the North Sea. It is the third contract of its kind that the firm has been awarded by Van Oord, having been involved in supporting it with the Eneco Luchterduinen project at an early stage by providing support on the design of the J-tubes for the Offshore High Voltage Substation and cable entry interface on the foundations.

This time round, Tekmar will provide 87 cable protection systems, including seven bellmouths, six of which are for array cables while one is for the export cable.

The company, which will be working with NKT Cables and LS Cable as the suppliers and Van Oord as the installer, will also provide full engineering of its systems to protect the power cables for their 25-year service life. This will be the sixth project for which Tekmar has provided protection for NKT Cables.

Tekmar chief executive James Ritchie said: “The award win on another major project demonstrates our industry reputation for delivering high-value solutions which are underpinned by our engineering expertise.

“Our J-tubeless cable protection system, TekLink, remains the market-leading solution.”

The award win demonstrates our industry reputation and expertise

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NEWS

“Looking forward, we anticipate that 2014 will be a pivotal year for the business with plans to relocate to larger premises which could effectively create the potential for production to treble. We plan to recruit more staff to facilitate this growth.”

>> Lawyers aid £28m deal

>> Lifesaving appointment Offshore training specialist AIS has appointed Rory Soutar from Aberdeen to head up its new Offshore Survival Centre which opens on Tyneside this spring.

Rory, 25, joins AIS from OPITO, the oil and gas industry’s training body, where he was responsible for setting and enforcing the industry’s training standards throughout Europe.

Prior to that Rory worked for another offshore training provider.

AIS’s offshore survival centre will train workers from the offshore oil and gas, wind and maritime sectors in survival techniques using facilities which imitate realistic emergency scenarios.

These include helicopter ditching at sea, sea survival, escape from smoke filled environments and evacuation via lifeboat.

The centre, on Tyne Tunnel Industrial Estate, will include an environmental pool, fire training centre and lifeboat and davit system, as well as classrooms, changing facilities, restaurant and meeting rooms with construction work expected to be completed by March.

>> Turnover set to soar MCPS, which is delivering a £1.2m contract for Dragados Offshore, expects a 35% rise in turnover for the final quarter of the financial year and plans major expansion this year.

The South Shields-based firm designs, manufactures and supplies anode based cathodic protection systems for the offshore oil and gas industry. With its headquarters and foundry on Middlefield Industrial Estate the company’s manufacturing facility has a casting capacity of 50 tonnes per week in zinc, aluminium and magnesium.

When the business won a significant export contract with Spanish company, Dragados Offshore, which works with Statoil, MCPS

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needed funding to deliver the required bonds.

Managing director Glenn English and financial controller David Bennett approached NatWest for the funding. It worked with UK Export Finance to provide overseas bonding facilities worth more than £200,000, which facilitated the delivery of the bonds without a cash outlay and provided cashflow for raw materials.

Bennett said: “We have had the support of NatWest for many years but knowing that MCPS now has the combined support of the bank and a government run organisation like UK Export Finance, gives potential foreign clients added confidence when in contract negotiations with MCPS. Export contracts equate to around 70% of our work.

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Energy lawyers from Bond Dickinson, which has offices in Newcastle and Stockton on Tees, have advised renewable energy developer RES on a £28.3m financing deal for two onshore wind farms. The deal, agreed with international projects and export finance bank KfW IPEX-Bank GmbH, takes the form of 15-year term loans funding the Tallentire Hill Wind Farm, a 12MW, 6 turbine wind farm in Cumbria and the Meikle Carewe Wind Farm, a 10.2MW, 12 turbine wind farm in Aberdeenshire. Banking partner Graham Jeffries led the team who advised RES on this deal. The team also included energy partner Sebastian Briggs and senior associates Stephen Ryde-Weller and Mark Brady.

>> C-STATE of the art training Maritime Training and Competence Solutions Ltd (MTCS) has signed an agreement to market courses and deliver training at a new facility for the subsea sector – the Centre for Subsea Technology Awareness, Training and Education, or C-STATE as it is known. The facility is the first of its kind and is a collaboration between industry and education. C-STATE has been created to address the growing skills gap in the subsea engineering and service sectors, by providing an unrivalled platform for specialist training and education. Subsea UK, the industry body, which represents the £8.9 billion subsea sector, revealed that British subsea companies need around 16,000 new recruits to help them grow to £11 billion and increase the country’s 45% share of a £20 billion global market.

Launched at Darlington College, C-STATE has been developed by Modus Seabed Intervention Ltd in partnership with >>

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MTCS, Darlington College, Teesside University, Tees Valley Unlimited and Darlington Borough Council. C-STATE has been created to ensure a supply of excellent personnel, and will offer through its training and education partners; MTCS, Darlington College and Teesside University, the only holistic approach to subsea education. The facility will offer courses from apprenticeships to further and higher education, and industry-recognised and accredited training.

Trainees will have direct, hands on access to a dedicated 200hp hydraulic remotely operated vehicle (ROV) in a safe and controlled environment, combined with classroom based training for all courses. Jake Tompkins of C-STATE explained “C-STATE has been launched as a facility to offer unique access to subsea remotely operated technology. The intent is to provide a platform for specialist training and learning delivered by our industry and education partners, all recognised leaders in their respective fields. We hope to be able to create significant opportunities for individuals and companies alike and ultimately bridge the skills gap in an important industrial sector. In terms of location, the Tees Valley is a significant and growing centre for the offshore supply chain.”

>>Repair business booming Houghton International says it is experiencing increasing demand for its services. The company provides repair, maintenance and life extension services of rotating electrical machines for the power generation industry.

Recent contracts for the Tyneside firm include the repair and refurbishment of a 17 tonne, 4.6MW thruster motor that had been severely damaged due to flooding on behalf of a global offshore services provider. CEO Michael Mitten said recently: “The company is progressing a number of key initiatives to facilitate our growth strategy through the expansion of our products and services, market sectors and the globalisation of our customer base. Market reaction has been extremely positive.”

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>> Firm’s shale gas mission Industry body NOF Energy has completed a fact-finding mission to the United States to learn about the controversial shale gas industry.

NOF Energy executive directors, board directors and member companies of the business development organisation for oil, gas, nuclear and offshore renewables sectors visited Oklahoma and Louisiana to meet government departments, shale gas operators and supply chain companies.

Shale gas is extracted by injecting water and chemicals at high pressure into underground shale formations, a process condemned by some environmental groups.

The delegation was given an overview of the US shale gas industry by representatives from the Oklahoma City University Energy Management Faculty and North Louisiana Economic Partnership.

It also toured a shale gas production site and supply chain manufacturing facilities, met with shale gas industry executives and had a tour of the Caddo-Bossier Port in Louisiana to highlight the impact of shale gas on port operations.

The visit also included a meeting with Oklahoma’s former Secretary of Energy, Mike Ming, who has recently become head of General Electric’s Global Research Centre.

George Rafferty, chief executive of NOF Energy, said: “As interest in shale gas increases it is vitally important companies with transferable skills, products and services, have a comprehensive understanding of this industry.

“The impact of shale gas on the United States economy and its energy industry has been extremely positive, so it is only natural for other countries, such as the UK, to want to exploit their own resources.

“The Government continues to signal its support for the development of a UK shale gas industry, which has been backed up by the recent investment made by Total in the sector. Therefore it is only prudent that the preparation work is done to form a viable, robust and knowledgeable supply chain that is able to meet the requirements of operators.”

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>> Helping farms use waste Law firm Ward Hadaway’s energy division has advised on a farm-scale renewable energy project.

Experts from the Top 100 UK law firm advised JFS & Associates, the UK’s leading farm-scale anaerobic digestion biogas project developer, on an agreement to develop a renewable energy facility at Washfold Farm in Leyburn, North Yorkshire.

The transaction was completed just three weeks after Ward Hadaway advised JFS & Associates on two other joint venture agreements at farms in North Yorkshire.

The ventures see JFS link up with farmers and specialist City financiers to construct and operate renewable power generation facilities on local farms. The projects enable farmers to use naturally occurring materials, including farm waste, for the production of biogas in a contained anaerobic digestion process. The biogas is subsequently converted into green electricity and heat for connection to the local distribution network.

>> Event focuses on energy Hot topics in the energy industry will be discussed at an upcoming event in the region. Energy: A Balanced Future 2014 will focus on key issues impacting on the energy industry and highlight future opportunities for supply chain firms. Among the speakers will be representatives from EDF Energy, GE Hitachi, Nexen Petroleum and Douglas-Westwood Schlumberger.

Networking opportunities will also be facilitated, with ‘VIP guests’ including senior team members from the likes of AMEC, Wood Group PSN and Aker.

The event takes place on 13 March at the Hilton Newcastle Gateshead, with an evening reception on 12 March See www.nofenergy.co.uk for more information.

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>> Narec hopes R&D partnership will deliver Swede success The National Renewable Energy Centre (Narec) at Blyth has signed a Memorandum of Understanding (MoU) with the Technical Research Institute of Sweden (SP). The agreement is aimed at boosting collaborative R&D activities and establishing a partnership that strengthens existing capabilities in offshore renewable energy. There already exists a great deal of synergy between the two centres, with both organisations bringing complementary assets and knowledge to the table in the areas of wind turbine blade testing and demonstration activities.

For Narec, this framework for co-operation marks the next stage of development; establishing international collaborations is a key dimension in strengthening and enhancing Narec’s existing capability as well as reinforcing its links with European research centres. Ignacio Marti, Narec’s chief technology officer, said: “Narec and SP have been working together for a number of years now but formalising this relationship will be beneficial to both parties, allowing us to exploit one another’s strengths and extend the scope and focus of our commercial and research activities.”

Pierre Ingmarsson of SP added: “We are very happy to be working together with Narec, which truly is a world-leading centre specialised in offshore renewable energy.

“Combining Narec’s capabilities with SP’s state-of-the-art competence, test environments and experience, in the fields of fatigue and reliability, measurement technology and high-voltage systems will allow us to develop and undertake more R&D projects for the benefit of the offshore renewables sector.”

>> Firm willing and Able to help new school Able UK is playing a lead role in the setting up of a new school being established to give young people the skills they need for careers in the engineering and renewable engineering companies. The Teesside company is among the key business supporters of the Humber University Technical College which has been given Government go-ahead and will be based in Scunthorpe.

>> Amec clinches £255m contract Amec, the engineering and project management giant with a base in Darlington, has won a renewed contract with the Kuwait Oil Company, KOC, for project management consultancy services for a portfolio of major upstream projects. The five-year ‘call-off’ contract is worth about £255m. It was won in a competitive tender and follows Amec’s successful delivery of two previous five-year contracts held since 2004.

“I am delighted that KOC has recognised our excellent performance over the last 10 years with the award of this significant contract,” said Alan Armstrong, Amec’s operations director in Kuwait. “We are delivering value for our customer and helping them achieve their 2030 vision of maximising the strategic value from the country’s oil and gas reserves.”

In 2012 Amec shifted operations from Yarm Road Industrial Estate where it was coming to the end of its lease to Darlington’s Lingfield Point business park. These offices house 450 people of whom the majority perform back office functions for Amec such as expenses, payroll, car hire, car fleet, and includes the finance team and the HR team.

There are also about 160 engineers operating out of Darlington in one of Amec’s engineering centres of excellence.

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L-R Malcolm Archer (Hadrian), Rebecca Crawford (Northstar), Doug Martin (Hadrian)

>> Investment boost for wind turbine installer An installer of small and medium wind turbines in the North of England has received a £100,000 investment.

Hadrian Electrical Engineering is based in Hexham and started trading in 2010, specialising in the supply and installation of renewable energy systems, as well as providing electrical and refrigeration support to local businesses and farmers in the North East.

The investment, which comes from the Finance for Business North East Proof of Concept Fund, managed by Northstar Ventures, is going to be used towards marketing projects, purchasing of new solar equipment and working capital.

>> Sector’s cost concerns

>> Industry facing skills crisis

Senior oil and gas professionals have forecast tighter monitoring of capital expenditure this year, according to new research published by consultancy group DNV GL. While 88% respondents to the research are confident about the sector, concerns over rising operational costs, a shortage of skilled professionals and competition from international rivals are causing professionals to focus spending on the projects that will provide the greatest return on investment.

According to the report, the proportion of companies planning to increase investment in new projects has declined by 18 percentage points over the past three years, from a high of 63% in 2012 to just 45% in 2014.

For the first time since 2011, overall confidence in the oil and gas sector has fallen – albeit only by one percentage point.

New research has revealed an increasing skills crisis facing the North East oil and gas sector.

The study by North East-based First Class Technical Recruitment showed that 62.2% of workers in oil & gas, as well as those working in the chemicals industry, are aged over 50, with 54% due to reach the average industry retirement age of 61 within the next seven years.

The largest percentage of workers - 47.6% fall in the 50 to 59 age group, compared to the 40% who are aged 20 to 49.

Only 4.8% of the workforce is in the 20 to 29 age bracket with 13% of workers in 30 to 39 age group and 20% fall in the 40 to 49 bracket.

The study of 3,000 workers from the North East chemical and oil & gas sectors which, between them, employ more than 50,000

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in the region, highlights the increasing challenge facing the North East to maintain its skills base.

James Gill, director of First Class Technical Recruitment, which has offices in Newcastle and Middlesbrough, said: “The skills base of the North East workforce is often cited as one of the major reasons this region secures work from global industry.

However, these figures signal a stark warning that the skills base is reducing dramatically as the workforce ages.

Having a top heavy workforce can only be detrimental to the region’s industry.

Investments in apprenticeships is still playing catch up and more than half of the over 50s age group is reaching retirement age.

This leaves a significant gap in the workforce in the huge 20 to 49 age group where the oil & gas and chemical sectors require skilled and competent individuals.”

ENERGY - RENEWAbLE AND OffShORE

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OVERVIEW

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BRAVE ‘RENEW’ WORLD AHEAD The North East’s strategic location, engineering heritage and improving infrastructure are helping to deliver exponential growth to offshore and renewables firms in the region.

But ensuring continual future success will require agility, diversification and greater global connections, writes Andrew Mernin Concerns over dwindling fossil fuel stocks and political volatility in overseas energy markets continue to bring opportunities to those businesses agile enough to respond.

Also driving orders among SMEs is the impending obsolescence of UK power stations and the demands of the low carbon agenda.

In the North East, 2014 is shaping up to be another year in which the region’s global reputation as a centre of excellence in offshore engineering is enhanced further.

Meanwhile, in the renewable energy sector, North East-based technology start-ups, university-led projects and diversifying multinationals are continuing to play their part in making clean energy sources more viable.

The recovery of the remaining oil and gas reserves from the North Sea is being aided by a growing stable of North East-based firms.

Last year it was estimated that £13.5bn was spent on new infrastructure to recover North Sea oil and gas, compared to £11.2bn in 2012, representing a 30-year high.

The Scottish Government believes there are 24 billion barrels of oil still to be recovered in the North Sea, worth a wholesale value of £1.5 trillion.

An estimated 98% of contractors in the oil and gas sector are also said to be looking to recruit this year, although, the North Sea is

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not without its longer term uncertainties and challenges.

A study published last November showed there had been 27 new wells drilled in the North Sea in 2013 to that point, compared to 41 in 2012 and 76 in 2008.

The Aberdeen and Grampian Chamber of Commerce study also showed a 6.5% rise in wages in the sector and was published within a few days of Shell and Statoil announcing the postponement of the £4.3bn Bressay oil field in the North Sea due, in part, to high costs.

Despite any underlying fears about the North Sea, though, there is plenty of evidence to suggest room for growth in terms of North East firms servicing what remains a hugely lucrative industry.

Deals such as OGN’s recent contract with EnQuest – which created 600 new jobs on the Tyne – highlight the sheer scale of opportunity for skilled North East firms.

OGN is providing fabrication services on the EnQuest Producer, a 249m long Floating Production, Storage and Offloading (FPSO) vessel. Other notable regional successes in recent weeks include Tyneside-based cablemaker Duco’s work on a £250m contract with oil giant Chevron North Sea. But, as evidenced by County Durham-based Tekmar’s contract win at the start of 2014

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to supply parts to a wind farm off the Dutch coast, the North Sea brings with it renewables opportunities too.

Further afield, North East firms are selling their engineering prowess and scientific endeavour to the world, and a global reputation is growing.

A recent survey by North East-based industry body NOF Energy shows that 70% of its members are exporting, with Norway, the UAE, Australia, Netherlands, Saudi and Brazil all featuring highly. Russia was also highlighted as a market with great future potential.

NOF members also say that oil and gas will remain their core focus in 2014 and nearly three quarters of respondents have set oil and gas as their priority sector for the next five years.

Of the approximate 50 subsea firms based in

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the North East – which collectively generate a turnover of more than £1bn per year and employ 10,000 people – 50% of goods and services are exported Aside from engineering excellence, knowledge and expertise are also being exported to global offshore and renewables markets.

International links, such as that forged this year between the National Renewable Energy Centre (Narec) at Blyth and the Technical Research Institute of Sweden, are helping to raise profile and enhance opportunities for the North East as an energy hub.

Smaller businesses are also getting involved in the worldwide drive to access harder-toreach resources and find solutions around renewables. Alongside a sea of tech start-ups with game-changing gadgets and components in the region, there are also problem solvers like

The battle between the fracking for and against camps will no doubt rage throughout the remainder of 2014.

Advanced Industrial Solutions.

The North Tyneside company is providing offshore training programmes as far afield as the Caribbean to riggers and other workers.

In the UK market, the national agenda is dominated by the need to secure a more balanced energy mix and lessen reliance on volatile markets.

While wind, wave and solar are yet to reach the commercial heights previously predicted, recent legislative changes (as reported later in this publication) have brought more clarity and confidence to the renewables sector.

This, we are told, is creating renewed optimism among investors and other stakeholders.

The government also announced in December that it would maintain the level of subsidies given for offshore wind as part of its National Infrastructure Plan.

ENERGY - RENEWAbLE AND OffShORE

It means the guaranteed price of offshore wind, known as strike prices, for 2015-16 will be maintained at £155 a megawatt hour (MWh).

In addition, the price for 2018-19 has been set at £140 per MWh, £5 more than originally set out in earlier proposals.

The North East renewables group Energi Coast – whose members have invested almost £400m to meet the demands of the renewables market – is now providing a collective push to help the region fulfil its potential in renewables.

Opportunities in anaerobic digestion remain also, underlined by the opening in Newton Aycliffe of the £8m Emerald Biomass plant, capable of powering 2,000 homes, in January.

Easily the most contentious of all the emerging energy markets in the UK, though, is shale gas.

George Osborne’s father in law Lord Howell caused regional outcry last year when he suggested fracking should be carried out in the North East because of its “vast desolate” areas.

And tourism chiefs and proud local residents were rightly angered by the regional aspersion.

But might the economic benefits of fracking actually be too great to ignore?

Overseas fact-finding missions to the States are already underway and many private sector firms are assessing what role they may play in the great shale gold rush. The Prime Minister has also pledged that local councils will pocket £100,000 for every onshore gas well drilled and receive a profits share of up to £1.7m per year for each site.

Then there are the tens of thousands of jobs the sector could create.

The battle between the fracking for and against camps will no doubt rage throughout the remainder of 2014.

In the meantime other pressing matters in the energy sector include the worsening skills shortage, which has gradually tightened its grip on the industry over recent decades.

Opportunities continue to be missed and lost as SMEs strive to find the skills they need to keep up with soaring demand.

There are reasons for optimism, with employers

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OVERVIEW

like Teesside’s DeepOcean investing in comprehensive graduate training schemes, as well increasingly well-equipped further and higher education courses and facilities.

Innovative solutions to the problem are also being provided – such as Newcastle-based Maersk Training’s initiative to get ex-forces personnel into the offshore wind sector.

Only time will tell whether the broadening of the talent gap can be arrested by such endeavours, and its threat to the regional economy removed. n

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XXXXXXXX INTERVIEW

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we have power to be energy leaders With new legislation, an improving economy and emerging opportunities from the North Sea and beyond, 2014 could be a pivotal year for the North East’s offshore and renewables sectors.

Andrew Mernin meets James Bryce, partner and head of the Energy team, at Square One Law, to assess the outlook and challenges for the sector and for the region’s energy-focused businesses

“There isn’t a part of the energy industry that the North East can’t make an important contribution to,” says James Bryce of the prospects for a region with much to gain from power generation and supply chain opportunities.

And his firm, Square One Law, is equally upbeat about the North East’s potential in the sector, having created a dedicated energy team and identified the sector as a key area of growth.

Among its larger energy-focused clients is Able UK, the industrial giant with a large footprint on Teesside, which is also currently developing a marine energy park in the Humber.

Others include Shepherd Group and Utilitywise, as well as numerous offshore supply chain firms, renewables businesses and energy-related technology developers.

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As the head of Square One Law’s Energy team, Bryce is well placed to assess the challenges and opportunities facing North East firms and the outlook for the sector that could go a long way to influencing the future prosperity of the regional economy.

In terms of renewables, securing long term investment is key, he says, and a recent legislative change should begin to have a

positive effect as it is implemented.

He cites the latest guise of the Energy Act, which was pushed through by the Liberal Democrat’s energy and climate change secretary Ed Davey and came into force at the end of last year.

It encompasses a package of measures which Government says will support the creation of 200,000 jobs in the renewable energy >>

One of the challenges has been a lack of certainty in the regulatory regime. This has meant that funders of the big capital projects were reluctant to commit

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sector, equating to around £40bn of investment in renewable electricity by 2020.

It aims to give investors and industry confidence to invest in the sector and puts a legal obligation on British governments to maintain the UK’s energy generating capacity while reducing emissions.

Bryce says: “One of the challenges in recent years in terms of renewables has been a lack of certainty in the regulatory regime. This has meant that funders of the big capital projects were reluctant to commit because they didn’t know what the Government was going to do.

This was alongside the underlying uncertainty in the finance markets that we have seen since 2008.

“The good news for the industry is that the Energy Act should go some way towards addressing this. This has given a lot more certainty - for offshore wind in particular.

Combined with an improving economic outlook, it means that investors are more confident of getting the desired returns on projects.

In addition we are seeing smarter and cheaper technology in areas such as solar which is making projects more viable and scalable.”

Aside from funding, another challenge to successful offshore and renewable projects is to ensure we maintain the flow of skilled workers into the sector.

“There is a perception that there is a lack of qualified engineers and people with required skills base coming through. In the oil and gas supply chain in particular, we’re hearing that many firms are concerned by a lack of skilled workers in the region, as demand for production remains strong employers are having to import skills from other regions and countries.

“I think a lot of the big employers are trying to address that in the private sector. NOF Energy is also focussed on this issue, with initiatives focussed around apprenticeships and reskilling people from the services.”

For those in the energy supply chain that do have enough talent on board, opportunities are emerging from numerous sources, both in the established power generation industries and in the emerging technologies.

Overspill of work from booming Aberdeen is increasingly flowing down the east coast.

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At last year’s Pilot Share Fair event – which brings together major offshore purchasers, suppliers and contractors in Aberdeen – around 30 North East of England firms attended and the upcoming ‘subsea expo’ in Aberdeen is expected to attract similar interest from North East based companies.

The North East is an attractive option for offshore firms at full capacity north of the border, says Bryce, but he also believes that more specialist professional services here would enhance its appeal. This is an issue that Square One Law is addressing, through discussions with consultants from Aberdeen with a view to harnessing their expertise and using it in this region.

Of other emerging offshore opportunities, Bryce says: “A lot of the 1970s and 80s oil platforms are approaching decommissioning.

Currently a lot of that goes to the Nordic countries or further afield. I think there’s a real opportunity for this region to increase its involvement in that part of the supply chain, and a coordinated approach could bring dividends.

“Decommissioning work is interesting – it involves an extensive supply chain, from the large multinational oil and gas producers right down to the smaller businesses, such as the precision engineers, subsea and topside logistics.”

Meanwhile, in the renewables field, the growing amount of wind power generated in the UK is helping to edge the sector up investor wish lists. New developments like the 9,000 sq km offshore site at Dogger Bank continue to present opportunities.

“Such projects are creating opportunities in the offshore supply chain, from cabling to surface engineers and support services,” Bryce says.

He adds that the North East’s growing cluster

of subsea firms is also anticipating new opportunities from large scale wind projects.

On a smaller scale, however, wind power continues to be dogged by a challenging planning regime and logistical challenges in grid connection.

“There was a lot of hope that smaller scale wind projects may take off with property owners doing micro-generation, but it hasn’t really reached the scale that some hoped.

However, it is an area we are watching very closely and we have supported a number of our clients in on-site generation projects.

Larger developers are now recognising the need for community buy-in at an early stage and I would expect to see much more strategic community engagement in the early stages of projects, with local residents having the opportunity to participate in the revenues generated by projects.”

While wind power has its vocal opposition few power sources have caused as much controversy as the arrival of onshore gas.

If some commentators are to be believed, onshore gas could not only alleviate the UK’s energy security fears, but also generate supply chain work for an army of SMEs in the North East.

“There’s obviously a public debate around safety and rightly so. However, there is interesting evidence emerging from the States that alleviates some of these concerns, which may mean the public becomes more comfortable with it. It could be a key part of the energy mix, but it needs to be fully explored and I suspect we’ll see legislation around this area in the near future.

“The numbers are certainly compelling – the Institute of Directors believes the sector could support 74,000 jobs in the next 10 years. If it was done in a controlled way and the planning regime was in place, there’s no doubt that >>

There was hope that smaller scale wind projects may take off with property owners doing micro-generation, but it hasn’t reached the scale some hoped

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North East could play a big part.

“Smaller supply chain firms from the offshore and general engineering sectors have transferable skills.

It could be some time before onshore gas is feeding wealth into the regional economy, so Square One Law are focused on working with other emerging areas of energy-related technologies. “Building relationships at the growth end of the market is where we really want to be.

“Other renewable technologies that we’re particularly interested in include biomass – where the region’s ports provide a great route for the import of feed-stocks; carbon capture and storage and pyrolysis. We also advise a significant national solar developer, and expect to see solar developments high on the agenda, particularly as house building begins to pick up.” he says.

And finance is of course essential in getting such enterprises to the growth stage.

Bryce says: “We’re seeing a lot of activity in fundraising. This has been essential in kick-starting the region’s technology and specialised engineering companies.

Another catalyst for success in offshore and renewables, says Bryce, could be a more coherent approach to overcoming the skills shortage, in winning export deals and securing investment.

“If you look at the automotive sector in the region, with Nissan, the automotive skills academy and various other initiatives, you’ve got a joined up approach to training people and attracting inward investment. You’ve also got some interesting public-private partnerships emerging. This has a hugely beneficial trickle down effect through the regional supply chain.

“With opportunities like the Dogger Bank, the world class subsea sector and the decommissioning of oil rigs, we believe that the energy sector has the opportunity to apply a collective approach from the North East – this could bring huge dividends.

“What is not in doubt is that as a region we have some world class companies contributing to the sector and the opportunity to be at the forefront of the rapidly changing energy and power generation industry for the 21st century.” n

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Leading the way with foresight and ambition Clients are becoming increasingly sophisticated legal purchasers and law firms need to find new and innovative ways to deliver legal services that meet the changing needs of their clients’ marketplaces.

In 2011, commercial lawyers, Ian Gilthorpe and Alan Fletcher recognised there was an opportunity to start a new, entrepreneurial and more streamlined business model and launched Square One Law. Ian Gilthorpe, senior partner, said, “We have created a more agile firm that is focussing on making the best use of technology and managing our people so they are more efficient and effective.

“We have grown rapidly and have attracted experienced, high quality people, from regional and international firms who have strong, long term relationships and really understand their clients’ businesses and sectors.

“However, the main reason for our success is down to our clients. We are involved in some of the region’s leading projects and have a diverse client base including Able UK, Shepherd Offshore, Tharsus, Miller, Utilitywise and Vardy Group.

“Just as all business leaders need to be more entrepreneurial to stay competitive in their markets, I believe professional service firms need to offer more options and improved service delivery for clients. The firms with foresight and ambition and with a clear strategy will outperform those unwilling to change.”

Square One Law is hosting a panel discussion on issues affecting the North East’s energy sector. The keynote speaker will be Chris Huhne (former secretary of state for energy and climate change) on 7 May 2014 at the Stadium of Light, Sunderland. For more information please contact stacey.toth@squareonelaw.com

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COMPANY PROFILE

Right person, right place, right time In an industry where project delays can cost millions, and that is suffering a significant skills shortage, it is important that companies can find the right type of specialist personnel when they need them Helen Smith, CEO of North East based recruitment agency, Oil Consultants, explains why finding the right person at the right time shouldn’t be like searching for a needle in a haystack.

“During the exploration and development stages of a project it can often be difficult to plan personnel requirements in advance,” begins Helen. “Certain tasks need to be performed by highly skilled specialist personnel for example, Well Testing, Coiled Tubing or Fishing. Most companies don’t retain large numbers of these individuals on staff and when they need extra personnel they often require them at short notice. The problem is, because these individuals are in such short supply and high demand, getting someone when you need them can be a complicated and time consuming task for an internal HR or Recruitment team.

So what are the reasons for these difficulties?

“There isn’t the time to employ a traditional recruitment model, i.e. advertising a vacancy and interviewing candidates, without incurring significant project delays and associated costs,” says Helen. “Furthermore, when it comes to these highly skilled roles, many in-house recruiters don’t have the experience and specific technical knowledge to be able to confidently select competent and capable candidates, simply because they are having to recruit for all job across the company. There are also the risks associated with selecting the wrong person. If a chosen individual is unable to do the job asked of them the company runs the risk of costly delays or potentially fatal accidents.”

Helen’s answer for companies is simple. “Use a

Helen Smith, CEO of North East based recruitment agency, Oil Consultants

specialist niche agency that supplies the highly skilled and experienced individuals within the industry,” she states. “Since they only supply personnel in these areas an agency, like Oil Consultants, will have developed the specialist in-house knowledge required to understand client requirements and identify appropriate individuals.

By focusing on these key disciplines we are better placed to understand the terms and technology involved as opposed to trying to master the details of every job in the industry.”

According to Helen there are other reasons why niche agencies like hers are so well placed to support clients; “Since we are working with a smaller group of consultants, in the thousands

The industry shouldn’t overlook the benefits that (a niche agency) can bring in ensuring that their projects are completed safely, on time and within budget

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rather than the millions an all-purpose agency may have, it is easier for us to keep track of candidates’ skills, experience and availability.

This means that when an individual or a team is required at short notice we can quickly select candidates for the client’s project. We run a full range of quality assurance checks on all our candidates, including technical interviews by industry experienced staff, and have developed a competency scheme with the input of industry clients and training bodies that many of our registered personnel have completed. This means that when we suggest someone for a job our client can be confident that person will do the job well and do it safely.”

“Finally, we have an in-house mobilisation team who are able to arrange international travel and accommodation and can assist with areas such as visa applications and Letters of Invitation. This means that when a client needs someone at short notice they can recruit from available candidates, regardless of where in the world those people are, and have them at any global project location when they need them. Our current record stands at just under 4 hours between receipt of request to the mobilisation of a selected candidate.”

In conclusion, Helen says, “whilst a niche agency like ourselves can’t boast the large databases and huge offices of the main stream recruiters, companies in the oil and gas industry shouldn’t overlook the benefits that we can bring in ensuring that their projects are completed safely, on time and within budget.”

For more information please contact Oil Consultants on +44 (0) 191 419 3180 or email contact@oc99.com

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INSIGhT

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THINKING GLOBAL Opportunities in oil and gas markets for North East firms extend far beyond the choppy North Sea, says Simon Crosby, lead international trade adviser at UKTI. Here he assesses the emerging markets waiting to be tapped into by the region’s businesses

In the UK, it is estimated that energy companies generate revenues of more than £90bn from domestic and international business and employ 600,000 people.

The UK is seen as a world leader in the exploration of oil and gas and the development of carbon management systems. Conventional estimates point to this rising to £200bn and one million employees by 2030.

The North East is a hotbed for skills and expertise in this sector where there are an estimated 15,000 companies involved in the energy supply chain, employing approximately 66,000 workers.

British goods and services have an excellent reputation in the energy industry and the North East boasts a wealth of expertise in finding, developing and extracting oil and gas. This market-leading expertise has been developed and honed over the last 40 years in

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the extraction of oil from the hostile waters of the North Sea. Coupled with this, the region’s deep-rooted engineering expertise has also seen it develop an international reputation in the field of renewable energy.

By its nature, the energy sector is a global business with opportunities in virtually every corner of the world. For this reason, exporting is firmly embedded in the strategies of most

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companies involved in supplying goods and services to the sector.

Whilst more than half of the value of the North Sea’s oil and gas reserves are yet to be extracted, up to 24 billion recoverable barrels with a potential wholesale value of £1.5 trillion, companies are mindful of the need to develop new business around the world to ensure continued long-term growth.

A magazine could be filled listing every global business opportunity that exists in the energy sector.

However, I have tried to select a few to give a brief flavour of the many developed and emerging markets that present companies in the sector with short and long-term growth potential.

For all goods and services, the United States is the region’s top export market with annual

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exports in excess of £2bn. Whilst this is a relatively mature market, the USA remains a key export opportunity for the region’s energy sector, followed by other markets such as Norway and Brazil.

Other markets that have moved up the export rankings and provided new opportunities for local companies in recent times include India, Venezuela, Kazakhstan and South Africa.

And longer-term, even more exciting opportunities will develop in countries such as Iran – estimated to have the world’s 3rd largest proven oil reserves.

This is roughly 10% of the world’s total proven petroleum reserves. At 2006 rates of production, Iran’s oil reserves would last 98 years if no new oil was found. For the first time in a decade, the leader of Iran attended the World Economic Forum in Davos.

The press reported that Hassan Rouhani was relaxed, laughing and talking incessantly about his “active foreign policy” to achieve his “economic goals”. Of course there is some way to go with negotiations for a workable trade deal, but this is a longer-term opportunity that North East businesses should be mindful of.

Whilst on the subject of ‘more challenging’ but potentially lucrative opportunities for the region’s companies, it’s worth mentioning that the International Energy Agency highlights Iraq, with its huge oil reserves, as the country that could be the single largest contributor to global production growth.

The Agency has reported that Iraq plans to boost its capacity to produce oil to 9m barrels a day (bpd) by the end of the decade as Baghdad rushes to rebuild its economy, which is still shattered by war and internal conflict.

Development of this opportunity needs further investment, in infrastructure, sustainable water management, and the robust legal and financial frameworks that investors and suppliers would expect.

More immediately, Australia appears to be one of the biggest growth markets and has been tipped by NOF Energy as the hottest of the future export markets.

In February, UKTI will be sponsoring a trade mission for North East companies to Western Australia (WA) to coincide with the region’s Australasian Oil & Gas Exhibition. This will

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be the 3rd trade mission to WA in the last 18 months: a reflection of the strategic importance this market holds for the North East exports. The oil and gas boom is tipped to add about 20 per cent to Australia’s growth over the next 13 years, with more than half of that to come from WA. As with other overseas markets, British expertise is highly regarded in the Australian energy market. Coupled with significant infrastructure projects, Australia has emerged as a key export opportunity for the North East for all aspects of the energy and extraction supply chain.

Other exciting opportunities are developing in countries such as Angola – Africa’s fastest

The International Energy Agency highlights Iraq, with its huge oil reserves, as the country that could be the largest contributor to global production growth growing economy. Angola vies with Nigeria to be Sub-Saharan Africa’s biggest oil producer, producing on average 1.65m barrels per day in 2011. Angola’s oil and gas sector is a long way from saturation point where opportunities exist throughout the supply chain and on the periphery such as in training, where there is very little provision of vocational and competence training throughout the sector.

The country’s labour pool has a very low skill set and companies need to invest heavily in training to meet Angolanisation and local content requirements. The sector is also calling for transferable recognised industry qualifications and standards.

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INSIGHT

With regards to export opportunities in the renewable energy sector, equally exciting developments are taking place. Following the Fukushima Nuclear Power Plant disaster in March 2011, countries in Asia are now looking at renewable energy as a serious provider of their energy needs. Japan, for example, is looking to embark on major shift in the makeup of its energy-mix and is aiming at a 25% target of renewable energy (offshore wind, solar PV and biomass).

Japan has 54 nuclear reactors, of which 52 are currently offline. Japan’s energy needs will peak in the summer and a shortfall is expected. Japan is also looking at electricity sector reform (generation and distribution); this may offer potential opportunities to UK business.

Elsewhere in the region, the Philippines’ government sees the growth of the renewables as essential for national energy security. Transporting fuel and transmitting energy throughout the Philippines – an archipelago of 7,107 islands – is expensive and it’s not surprising that the Philippines has the highest electricity rate in Asia. The country could be considered a world leader with 30% of its power coming from renewable sources and the first in Southeast Asia to invest in large-scale solar and wind technologies.

Whilst there is much to be excited about the wealth of energy sector opportunities around the world, relying too much on raw economic indicators such production growth, can lead a business to make some poor decisions. Any company’s capabilities and resources need careful examination to ensure it is suitably equipped to tackle these, generally more challenging, long-haul markets. Soft skills, such as language or cultural affinities, can be particularly helpful tools for success in the markets already mentioned. And strong business relationships at the right levels, which are sometimes even more important than in the developed world, can boost a company’s chances of success. But again, developing relationships in far-away countries takes time and costs money. A lack of familiarity, language barriers or distance can derail any company’s attempts to access a new market.

But, when you get it right in more challenging markets, the rewards can be immense. ■

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Leading the fight against skills gap threat Since its opening nearly two years ago Newcastle College’s Energy Academy continues to go from strength to strength in its aim to meet the need for high level skills in the regions offshore and renewable energy sector Based on the North Bank of the Tyne, an established hub for businesses in the offshore sector sector, the Energy Academy delivers training to employers across a range of vocational areas and provides a pipeline of skilled job-ready individuals who can help to address the significant skills shortages in this area.

The engineering and manufacturing sector is facing a substantial challenge in replacing the

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ageing workforce which makes up more than 57% of its current employees. It is predicted that more than 820,000 new engineers will be required by 2020, with many of those roles being required in the subsea and renewable energy sectors.

Therefore, students who have been trained in practical engineering skills are essential in providing the engineering workforce of the future.

Facilities at the 20,000 sqft Energy Academy ensure that industry required skills are embedded

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into the curriculum. This includes equipment, such as a computed numerically controlled (CNC) machine, autoclave pressurising apparatus related to the manufacture, assembly and maintenance of offshore wind turbines, industry standard welding bays and electrical workshops.

By listening to business the Academy has developed a range of training options as well as developed new ways for employers to engage with the College, this includes:

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COMPANY PROFILE Newcastle College, through the Energy Academy is focused on providing industry standard training for Employers in the renewables and subsea industries. The aim is to provide a training hub, close to the employers to meet their training needs and supply a high calibre of students employment ready to work in this rapidly growing sector

• Training of offshore manufacturing apprentices and higher level apprentices • Work placement or intern opportunities • Foundation Degrees in Renewable Energy Technologies and Subsea Engineering • Introduction to the Renewable Energy Industry • Sustainability courses • Welding and Fabrication • CNC – full five axis training • Instrumentation and SCADA Engineering employers are also adopting a benefit-in-kind approach by offering student enrichment opportunities such as guest lectures, factory tours, live project briefs which are a very beneficial way for businesses to influence and motivate young people who are going to be their workforce of the future.

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For more information on The Energy Academy and what it can do for you, or to register your interest, please contact Rob Storey (Business Development Manager) directly on 0191 2004 950 or email: rob.storey@ncl-coll.ac.uk

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payback for investor

One of the North East’s most celebrated industrialists is preparing for a year that will bring significant growth and could create more than 4,000 jobs. Peter Stephenson outlines Able UK’s plans to Andrew Mernin

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For over 10 years Teesside entrepreneur Peter Stephenson has been investing heavily in land acquisitions at the North’s once-ailing ports anticipating a long-term reversal in fortunes.

In that time he spent over £100m amassing and developing key assets and now with the offshore wind, power generation, oil and gas and decommission industries all on an upward trajectory he is reaping the benefit.

On Teesside and Humberside Stephenson’s investment is fuelling key strategic, regional and national developments and the good news keeps on coming for Able UK. Late last year its flagship development on Humberside – the Able Marine Energy Park – received a major boost when the Secretary of State at the Department for Transport authorised the granting of the Development Consent Order – the planning permission.

The Able Marine Energy Park (AMEP), covering 906 acres, is on the banks of the Humber estuary and is earmarked as the UK’s leading location for the offshore wind sector.

Once fully operational, the marine park will provide 1,300 metres of deep-water quayside, creating a potential 4,100 jobs in the renewable and related energy sectors.

In recent weeks the Humber Local Enterprise Partnership has successfully tapped into the Enterprise Zone Capital Grant Fund, with up to £14.94m being made available to assist in the delivery of vital infrastructure for the AMEP. The grant will help to bring forward a first phase programme of general infrastructure works, set to be completed by March 2015, creating around 350 construction jobs.

It includes the development of 240,000 sq m of commercial floorspace, including 3.7km of internal access roads, 1,355m of multi-rail sidings, as well as high-voltage electricity supply, together with mains

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This is further good news and reflects the plans of Able both on the Tees and the Humber, which could lead to an investment of more than £500m over the next five years or so water, gas and sewage services.

Stephenson, Able UK’s founder and executive chairman, said: “We are waiting for the formalisation of the Development Consent Order authorised by the Secretary of State for Transport in December. Like any large-scale application it is subject to legal challenge but, once that is out of the way, we will be on-site and that should be later this year.

“The grant offer is another very clear indication of the high level of Government support for the AMEP project and underlines the critical role that the development will play for the UK’s renewable energy sector.

“Furthermore it reflects the very significant

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Able UK is forging ahead with projects to capitalise on an upturn in the fortunes of UK ports

economic impacts that AMEP will have locally, regionally and indeed nationally.

“This announcement is further good news and reflects the extensive investment plans of Able both on the Tees and on the Humber. Plans which could lead to a total investment of more than £500m over the next five years or so.

“Over that time we are confident of creating at least a couple of hundred new jobs at Able Seaton Port (ASP) and, in time, AMEP could attract companies with the potential to create over 4,000 jobs.”

Closer to Able’s Billingham headquarters Stephenson anticipates significant growth in the energy-related industries with over £100bn

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of investment expected in the sector in the UK in the next 10 years.

Able’s Seaton Port hosts the world’s largest dry dock facilities and is supporting its renewed focus on the oil and gas sector.

Able sees increasing potential in securing contracts for the upgrade and maintenance of oil and gas drilling rigs and floating production facilities and decommissioning.

Stephenson said: “This has been a very welcome addition to activities at Able Seaton Port and has grown significantly since the first oil rig came in for maintenance in June 2009.

“Since that time we have received 20 rigs which have provided new, and much >>

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Able has demonstrated its long-term commitment to Teesside and Humberside through investment

needed, opportunities for the wider Teesside supply chain.

“We anticipate that 2014 will see at least another eight rigs requiring maintenance and upgrading works and we are now accommodating both jack-up and semisubmersible rigs for an increasingly diverse ownership, in fact 2014 will see three new clients coming here for the first time.

“One of our key strategies has always been

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to stay ahead of the market and to anticipate future needs. Over the coming months we will be looking at further investment in new capital equipment – including the procurement of new cranes and associated equipment.

“In addition, we will also invest in new infrastructure and specifically in new quays.

One new quay will enable the receipt of single piece load-ins of redundant topsides and jackets for decommissioning and others to

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increase capacity for the handling of specialist cargoes including oil rigs and the deployment of offshore wind components.

“I am confident that we will secure new work in the field of oil rig decommissioning and contracts that will extend over a number of years.

“We should also be able to announce our first contracts linked to offshore wind. Equally the investments should further increase capacity for rig upgrades. Since its acquisition in 1996 Able Seaton Port has seen investment of around £50m and that is set to increase by a further £30m this year.”

While Able’s main offshore wind facility is located south of its Teesside base, Stephenson views the Humber, Teesside and the rest of the region as more of a ‘Greater North East’.

He said: “We believe, and others confirm this fact, that AMEP will be a significant national resource and that the benefits will extend beyond the Humber.

“We are set to be establishing a significant new business cluster – based very much on the fact that scale drives down costs – and to that end it is better for companies to participate directly and to join the party.

“The South Yorkshire region is one that works very hard to promote AMEP as they see that it will provide large demanding customers on their doorstep. The message is really the same for North East companies.”

Able has demonstrated its long-term commitment to Humberside through its involvement in the development of the Humber University Technical College in Scunthorpe along with major players such as Tata Steel, Centrica Storage, North Lincolnshire Council, and the University of Hull.

Stephenson along with the college’s fellow supporters believes it will help overcome the looming skills gap facing the energy and engineering sectors.

He said: “The labour market is pretty tight and recruitment is not always straightforward.

In fact, that is one of the reasons that on the Humber we have played a lead role in the successful bid to establish the Humber University Technical College – this is aimed specifically in getting our young people engaged and enthused in engineering and to provide a skilled workforce for the future.

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Stephenson is hopeful that the skills of his loyal workforce will help it win the prestigious dismantling contract for the tragic Costa Concordia

“At the end of the day we are only as good as our people – they are our main asset.”

Stephenson is hopeful that the skills of his loyal workforce will help it win the prestigious dismantling contract for the tragic Costa Concordia.

Able has submitted a bid to dismantle and recycle the stricken vessel at its Teesside Environmental Reclamation and Recycling

facility at Able Seaton Port.

He said: “We will not know whether or not this contract has been secured until the summer. What I can say, with confidence, is that we will be offering the very best solution in terms of environmental performance and safety controls – the Best Practicable Environmental Option – but that we will certainly not be the cheapest. If secured, the

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contract would likely see over 100 new jobs for a period of around 12 months.”

Stephenson is proud of Able’s achievements and believes the ethos he has encouraged in his business helps it stand out from the crowd.

“There are a couple of areas that I’m sure set us apart from a number of other operators.

“Firstly, we are privately owned and very much in control of our own destiny – we are not operating at the behest of city analysts with a clamour to maximize dividends and shortterm returns.

“Instead we have been able to take a longerterm view – across a number of areas – to define a strategy and to stick to it. Secondly, we do the hard work in perpetually reviewing opportunities, identifying and addressing risks, getting deep into the needs of the market and, ultimately, putting our money where our mouth is.” n

Finance North East For Business Growth Plus Fund

Fund is catalyst for new contracts An innovative new fund launched in 2013 by Tees Valley Unlimited and managed by FW Capital aims to help businesses in the Tees Valley unlock additional contracts valued at £700 million over the next ten years.

FW Capital has backed ambitious businesses across the North East to help them achieve their

growth plans from the North East Growth Plus Fund since 2010. Now the £10 million Tees Valley Catalyst Fund can help businesses of all sizes secure new contracts by providing short-term finance to fund performance and warranty bonds.

The North East is home to many businesses providing new technologies and services to the

To find out how FW Capital can help your business call our investment team on 01642 343 494 www.fwcapital.co.uk/northeast

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global energy industry, with a particular focus on the oil and gas and renewables sectors in the Tees Valley.

FW Capital is keen to ensure that more Teesbased businesses will be able to seize new opportunities to expand in both their domestic and overseas markets.

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Port of Sunderland: immediate access to the open sea Sunderland’s coastal location has always played a huge part in its economy. The city’s port is ideally situated, with immediate access to open sea and three kilometres of river and dock berths. Add to that a track record for 24/7 delivery, dynamic, commercially minded management and a ‘can-do’ outlook, and you can see why the Port of Sunderland is flourishing.

E info@makeitsunderland.com T +44(0)191 553 2100 W makeitsunderland.com

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COMPANY PROFILE

Port makes waves with twin city Port of Sunderland has carved a strong relationship with its twin city, Saint-Nazaire after a recent representative visit to the French harbour assisted in strengthening its business connections.

REPRESENTATIVES from Port of Sunderland recently made their first port of call to the city’s twin town, Saint-Nazaire to visit its harbour facilities and forge new links with industry leaders.

Representatives, including Port of Sunderland’s director, Matthew Hunt, visited the French town on January 8 over a period of four days to strengthen the 60 year relationship while sharing a best practice framework around Saint-Nazaire’s port facilities.

Sunderland and Saint-Nazaire were twinned in 1953 during a period when the British Home Office was promoting links between towns in Britain and elsewhere in Europe to foster peace and harmony following the end of the Second World War. They were matched due to the common maritime and shipbuilding heritage they share.

The recent visit included a detailed programme of meetings with logistics organisations, offering an introduction into European commercial opportunities and Matthew Hunt, port director of Port of Sunderland believes the trip was a useful fact-finding opportunity.

He said: “We were presented with the opportunity to visit the French port after Monsieur Joel Batteux, mayor of Saint-Nazaire came to Port of Sunderland in November 2013 and was impressed, not only by the level of its recent development but its future development potential.

“Port of Sunderland has a clear vision for growth and the prospect of benchmarking and learning from an extremely successful port was a fundamental and unmissable opportunity.

“The visit was an extremely beneficial insight into the ways in which other European port’s operate and really helped us to review and refine our renewable energy offering and understand one another’s vision for the future.

“Our twinned partnership means we have a synergy in place that can only be strengthened through the sharing of best practice. We have a fantastic

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tourism activity, based on their coastal positions; their development of new sectors to stimulate their local economies and provide employment; and their sustainable approach to urban planning.

Saint-Nazaire is the leading port on France’s Atlantic seaboard and the fourth largest major seaport authority. Its port area extends over a 65-kilometre stretch along the Loire Estuary and offers a diverse range of port facilities located on sites spanning its upriver and downriver sections.

Councillor Paul Watson, leader of Sunderland City Council, said: “We are very proud of our productive 60-year relationship with Saint-Nazaire and continue to look to the future, channelling our combined projects in the offshore sector and beyond.

“The recent visit brought together two burgeoning European ports and offered the opportunity to share best practice and forge new links with key industry figures, which in turn will help to further strengthen the Port of Sunderland’s offering.”

Matthew Hunt, Sunderland port director

port that is really starting to carve out a strong reputation and we really do believe that this relationship could hold the key to a stronger city economy.”

Last year, Port of Sunderland extended its offering with a raft of strategic on-site developments, making it ideally suited for supporting the North Sea oil and gas and renewable industries. The port also recently added to its cargo handling capabilities with the purchase of a LHM 420 Harbour Mobile Crane via international crane manufacturer Liebherr.

Although Sunderland and Saint-Nazaire vary in size (Sunderland having a population of approximately 285,000 and Saint-Nazaire one of 70,000), they still share many similarities, including their port activities; their growing

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Port of Sunderland has a clear vision for growth and the prospect of benchmarking and learning from an extremely successful port was a fundamental and unmissable opportunity

For all Port of Sunderland related enquiries email info@MAKEitSunderland.com

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INTERVIEW

MISSION POSSIBLE Having awoken what was once the thriving heart of the region’s offshore construction sector, OGN is now pressing ahead with plans to bring bigger oil, gas and renewables projects to the North East. Andrew Mernin reports on the next stage of the firm’s rapid development >>

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Any doubts that the North East could still cut it in world class heavy industry were shot down last year when a giant example of the region’s capabilities was lugged down the Tyne.

The North Sea oil platform – the last piece of the £400m oil rig jigsaw built by OGN at the Hadrian Yard in Wallsend – showed just what this region has to offer the offshore sector.

OGN was formed out of Lowestoft-based SLP and came to Tyneside in 2008 with a £25m investment plan to build an offshore fabrication business using the vast facilities at its disposal.

The deserted site OGN eventually acquired perhaps took some vision to picture as a thriving and globally competitive hub of activity.

But one senior figure within its ranks – Craig Melville – had a clear notion of what could be achieved there, having been one of the thousands of people who worked under the site’s previous inhabitant, Amec.

The chief commercial officer and deputy CEO says: “We targeted this facility because it’s in the North East, which has a heavy engineering pedigree. There’s a big catchment area of those type of skills and similarly there’s a good supply chain network around here for supporting the industry in areas like scaffolding and valve or cable supplies.

“Add to that the Tyne itself, which is one of the major ports in the UK and well serviced by vessels from the oil and gas community, and being here is far better than being in a remote part of Scotland. Local infrastructure has been fantastic as has supply of white and blue collar workers. It’s one of the better places to be.”

In its official year one of trading in 2010 turnover was £5m. Two years and a hefty offshore contract win later, that figure had become £150m.

Last year the business registered a 70% surge in profits despite revenues dropping £50m to £99.1m, a reflection of work with lower overheads tied into it rather than diminishing orders or cost-cutting.

“We’re looking at turnover of around £100m this year,” says Melville. “We’ve been up to £150m but the mix and the nature of our contracts nowadays happens to be projects where the customers are doing the design of the structure, they’re supplying us free

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issue with the equipment and materials and we’re just doing the fabrication, assembly and erection work.

“Previously customers have given us contracts where they’ve asked us to supply the materials. We’re looking at the same amount of labour on £100m as we did with £150m turnover and we’ll probably burn something like two million man hours’ worth of work this year.”

The landmark deal which set OGN on its path to exponential growth was the £150m contract it won in late 2010 with US-based Apache Corporation to build a North Sea oil platform, supporting 1,000 jobs at the site for two years.

This May it will complete an offshore foundation for Talisman in Aberdeen, while it is currently getting to grips with the

The Apache contract generated around £50m worth of supply chain opportunities within the region, with some SMEs securing work for as long as two years on the project.

The EnQuest project requires less external help, since it is what Melville describes as a “Meccano project”.

“We’re just the arms and legs putting it all together,” he says. However there is still between £10m and £12m worth of subcontracted work available in areas such as electrical installation, craneage and painting.”

Considering oil and gas-related work beyond EnQuest, Melville says: “There are two or three significant contracts to be placed this year and we are well placed to win them. I can almost guarantee that we will secure one of them and I have a high degree of confidence that we could secure two. These things have a

Everyone in the supply chain is extremely supportive of our quest of securing the big contracts because they feed off it pretty well

multi-million contract it won last November with EnQuest.

That contract will create 600 new jobs as OGN works on a 249m vessel that will be deployed to the Alma/Galia field in the North Sea. Melville says: “The Apache deal gave us a real solid foundation as a business and gave us roots into the industry pretty well and pretty deep. We’re targeting bluechip organisations and global energy businesses and at the moment we tend to secure big contracts nine to 12 months apart – that’s the nature of it.

Between the EnQuest, Talisman and Apache contracts, there’s £350m to £400m worth of business.”

OGN has a flourishing supply chain within the North East. Melville says: “Everyone in the supply chain is extremely supportive of our quest of securing the big contracts because they feed off it pretty well.”

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long gestation period of nine months or so, and we’re still in the race right through to this stage.”

The company is also gearing up for expansion in the renewables sector, having had planning permission granted to build a £50m offshore wind turbine manufacturing plant at Wallsend.

The project is backed by £4.5m of Regional Growth Funding and is likely to support hundreds of new jobs.

As part of the UK Government’s drive to mobilise up to £110bn of energy investment by 2020, the offshore wind strike price will be at a high of £155 per MW/h in 2014/15 before falling steadily to £135 by 2018/19.

“Interestingly for the first time we’ve seen quite an increase [in offshore wind interest] since the Government confirmed the strike price at the back end of last year.

“The renewable energy market has picked >>

ENERGY - Renewable AND Offshore

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INTERVIEW

WINTER 14

up in terms of the interest being shown by the customer and we’re seeing more enquiries.

“Also enquiries that we tendered last year or even the year before are being brought back to life.

They had lost momentum and all of a sudden they’ve kicked up again.”

Having laid the foundations for its assault on the wind market – securing funding, planning permission and drawn up a blueprint for its new plant – the company is now awaiting the market assurances it needs to press ahead.

“This is the step change year that I see us clicking into first gear in terms of wind power. This year has all the right feel about it that we’re going to see the first evidence of contracts being placed and once it’s underway I expect that to continue for the next five to ten years if not beyond.

“I think we’ve just been free-wheeling over recent times in the part of the offshore wind market we’re looking at – the big infrastructure side of it.

“At the moment we’re really taking a much closer look at the market. We’re not going to build a big factory and have it stood there doing nothing. We need certainty that the offshore wind market is going to take off to the extent that’s been previously indicated.

So we’ve got a lot of market research work going on to get a much firmer handle on the certainty of that market.”

The new 36,000 sq m plant will make wind turbine foundations, including those developed in partnership with OGN’s subsidiary Aquind, for UK and European offshore wind farms.

The jacket structures from OGN’s wind power operations may not have the same head-turning powers as their oil and gas counterparts when they finally are shipped down the Tyne.

The steel wind turbine foundations weigh in at around 700 tonnes, compared to 6,000 tonnes in oil and gas.

But they may be no less lucrative in the long term for OGN, with Melville harbouring ambitious plans for the firm in renewables.

“With the new facility in place we would be able to manufacture up to 150 structures per year, but even without it we still have the capacity to make around 30.

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“The oil and gas market alone could potentially support that amount of employees if all the developments on the drawing board take off.”

OGN’s vision for its renewables work is less labour intensive.

“Our approach would not be heavy engineering. Instead we’d be looking to have a real mindset change and be more of what we call mass manufacturing like a Nissan, where you’re making repeat products and lots of them. So there’d be a high level of automation of that and you could be looking at between 500 and 750 jobs being supported in a modern renewable energy mass manufacturing facility.”

Alongside its plans for growth at home, OGN is busy spreading the word of what remains a relatively young brand across Europe.

And, according to Melville, the company eventually may even look beyond the

We envisage one day our renewables operations could be just as big as our oil and gas activity. If the market was there we wouldn’t rule out looking to invest in other facilities in the North East, whether that’s on the Tyne, Wear or Tees “We envisage that one day our renewables operations could be just as big as our oil and gas activity. If the market was there we wouldn’t rule out looking to invest in other facilities in the North East, whether that’s on the Tyne, Wear or Tees.

“Collectively the offshore wind market could be as big as the oil and gas market has been over the last 40 years. Perhaps it could take over the whole of this facility, or we may invest in a new facility somewhere else and do all offshore wind there and leave all this facility as an oil and gas one.”

While Melville says the Hadrian Yard could accommodate 5,000 workers – albeit in a scenario threatening “organised chaos” – he believes the optimum capacity is closer to 2,500, with 1,500 jobs supported in the North East supply chain.

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Continent for new opportunities.

“We started very parochially working with customers in Aberdeen and then branched out to make ourselves known in the London area and we’re now actively involved in pursuing opportunities in the Norwegian sector. [Our focus] has then flowed down into the Danish and Dutch sectors,” he says.

“One day we will look to step outside of the European sector but we are cautious and don’t want to get our fingers burnt somewhere where we don’t know the culture or business practice.

You’ve got to go and start in places where you do understand the business philosophies and the general culture.”

Given OGN’s track record to date, few would bet against the firm becoming a global name in the not too distant future. n

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COMPANY PROFILE

PD Ports is the vital link for energy The ports of Teesport and Hartlepool, owned and operated by PD Ports, play an important role in the local, regional and UK economy. These two ports lie on the North East Coast of England, servicing global businesses on a daily basis. Almost every country in the world has some representation or connection with the port or port related businesses on the river.

In addition to the substantial volumes of liquid bulks and fuels handled at Teesport, in recent years we have seen a burgeoning renewable energy sector which is largely fuelled by the government’s commitment to decarbonise power generation. At PD Ports we are equipped with the knowledge, infrastructure and expertise to support the renewable energy sector in its growth and expansion.

PD Ports provide stevedoring at Hartlepool, Howden, Hull, Immingham, Isle of Wight, Keadby and Teesport for a wide range of cargoes. In supporting the renewable energy sector PD Ports has the ability to handle large project cargoes such as wind turbine components through to bulk materials such as wood pellets or biomass feedstock. In addition regular volumes of coal and coke can also handled. The labour force employed

by PD Ports has the specialist skills to complete these operations with care and efficiency.

In 2012 the Port of Hartlepool became the main construction logistics hub for the Teesside Offshore wind farm developed by EDF Renewables Ltd. The project completed at the end of 2013 and during this time the world’s first purpose built turbine installation vessel, the MPI Adventure, came into the Port of Hartlepool to assist with the load out.

Jerry Hopkinson, Managing Director – Bulks and Port Services, said: “The arrival of the MPI Adventure highlights our capability to handle large, industry class offshore vessels at the Port of Hartlepool whilst further demonstrating our continued progression and growing strength in this sector.”

The extensive available land bank and deep water at the Port were fundamental components in the delivery of this project, providing dedicated assembly areas for the massive structures with direct access to the North Sea.

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The Port of Hartlepool

The arrival of the MPI Adventure highlights our capability to handle large, industry class offshore vessels at the Port of Hartlepool whilst further demonstrating our continued progression and growing strength in this sector Through this project and many others, PD Ports has shown what can be achieved at the Port of Hartlepool and also highlighted the benefits of being at a Port with direct access to the North Sea. In June PD Ports will be exhibiting at Renewable UK’s Global Offshore Wind conference in Glasgow, Scotland. The three day conference will address policy, development and technical aspects of the offshore wind energy industry and allow PD Ports to showcase its recent experience and future capability to the sector.

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If you want to know more about PD Ports visit the website www.pdports.co.uk or call 01642 877000

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taking it to the limit

Having helped to lay the foundations for the North East’s thriving subsea sector, Duco is now investing in its future as it strives to maintain its global competitiveness. BQ reports on the ongoing evolution of this offshore champion When French multinational Technip’s new Tyneside facility opens this year it will be among the most modern and capable subsea umbilicals plants in the world.

It will also form a key component in the growing critical mass of subsea innovation and production being undertaken in the region by long established North East firm Duco and its French parent.

Duco supplies umbilicals, subsea products and offshore services to the oil and gas industry and trades on its ability to challenge the limits of the possible.

The company, which fabricates umbilical systems used to control subsea wells for oil and gas production, has three manufacturing locations as well as its Newcastle site – in Houston, Angola and Malaysia.

Through innovation and extensive research and development capabilities, it has pioneered umbilical solutions for harsh environments and extreme dynamic applications that require superior engineering and product quality.

And, with more than 30 years of project execution under its belt, it is now taking steps to prepare for the next 30 years.

Its new steel tube umbilical facility in Walker, which has received a contribution from the Regional Growth Fund, is being set up to

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access a large portion of both the global thermoplastic and steel umbilical market.

It is the largest single storey building in Europe and will house a state-of-the-art vertical helix assembly machine (VHAM) and large storage carousels to accommodate the bigger diameters and longer lengths of umbilicals that clients require for deeper waters and more challenging environments.

The design is based upon a scaled up version of the assembly machine at Duco’s sister plant in Houston, US. It will soon be operational and the new manufacturing facility is building a strong backlog of large steel tube projects already, Duco says.

Its opening follows the 2012 launch of Duco’s new research and development facility also in Walker, close to its main manufacturing plant.

The company says this new facility underscores the priority it has always placed on research and development, and that it will take its capabilities to a new level.

The centre allows the company to work with the latest materials and develop solutions that will produce key improvements in areas such as ease of installation and long term service reliability.

Drawing on strong relationships with clients

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such as Total, Chevron and Exxon, the company gains valuable market insights which help it to stay ahead of the industry’s emerging needs.

Around 70% of global subsea developments now require steel umbilicals as the subsea sector is going to greater depths in the ocean.

This means innovation is required to allow it to continue being a key player in the global market.

Duco’s Tyneside operation dates back to the late 1970s, when it was part of Dunlop, with the name Duco appearing in the late 1980s as a partnership between Dunlop and French company Coflexip.

Its initial aim was to develop the ground breaking technology needed to recover oil and gas reserves from the North Sea. In 1990 Duco took up its present location at Walker Riverside on the Tyne. The site is ideally placed with a deep water berth providing easy access to all of the European fields, the southern North Sea fields and all of the Norwegian fields, as well as offering excellent shipping access to the rest of the world.

Over the past 25 years the company has led the world in the thermoplastic subsea umbilical market and now, as the exploration and production companies head into >>

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XXXXXXXX

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Of course we focus on quality, reliability, and innovation, but our clients do want to know that products have been proven in the field

deeper and deeper waters the need for reliable supporting infrastructure is ever more critical.

Subsea production is now the main type of recovery method in most deepwater oil and gas provinces. The global market is currently worth around £20bn and is expected to quadruple to £80bn by the end of the decade.

Subsea production systems involve the installation of a series of wells on the seabed which can be operated from a fixed or floating platform.

Umbilicals form the critical link between a subsea production arrangement and a remote facility providing control, power, communications and chemical supply services.

Applications include production control, chemical injection, subsea pumping and processing, gas lift and underground gas storage among others.

Sarah Cridland, vice president, projects and engineering at the company, says the firm’s

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track record of successful projects is a factor that reassures potential and existing clients.

“Of course we focus on quality, reliability, and innovation, but our clients do want to know that products have been proven in the field,” she says.“We can illustrate major projects where products have been used in the past, but in addition we can unite this with brand new cutting edge technology as well.”

Cridland also forecasts ongoing growth of the business on Tyneside: “We see a lot of very good opportunities going forward.

We are ideally placed with all of our assets around the globe to support clients as they go into deeper waters and more challenging environments, and that is a big focus for us.

There is definitely a very positive outlook in the umbilical business and our ambition is to ensure that we are very much a leader of that market.

“Our vision is to maintain our growth and

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Duco places huge emphasis on innovation in order to respond the the ever-growing demands of the subsea sector

continue to deliver the high end thermoplastic umbilicals that we are renowned for, as well as successfully delivering the very large steel tube projects that we are working on at the new facility in Newcastle and in Angola and Houston.”

And she believes ongoing investment in developing new technologies is central to achieving even greater success on Tyneside and further afield.

“Technology is one of our strategy pillars and is a key differentiator, as is the quality of our products. We have already established a track record for the longest, deepest, and heaviest umbilicals and as these boundaries push further, we aim to keep our position at the front of the market, and uphold the recognition we have earned for providing revolutionary technology.

“What is important to us is that we are recognised as a total solutions provider, who can supply the whole end-to-end system to the client, and offer them total support. We are so much more than just a manufacturer and can really provide solutions that help our clients be more successful.” n

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What is important to us is that we are recognised as a total solutions provider, who can supply the whole end-to-end system to the client, and offer them total support

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Houston – we have solved the problem

Chirton Engineering’s rapid rise as the machine shop to the world’s oil and gas giants has been nothing short of phenomenal in recent years.

Andrew Mernin visits the Tyneside firm on the eve of its next expansion

The black ring with a circumference little bigger than a football which Michael Morris proudly hands me from under a pile of metal parts looks pretty insignificant. Save for a few unusually positioned holes, it seems – to the uninitiated – just a plain old pipeline component of some sort. Not so, says Morris, business development manager at Chirton Engineering in North Shields, North Tyneside.

My attention is brought to a flipchart with drawings of the ring’s inner-workings Sketchings, of a complexity that da Vinci would be proud of, reveal just how much head­scratching and endeavour went into its creation.

The part is, in fact, the solution to a puzzle that had a global oil and gas giant baffled and out on a worldwide wild goose chase to find a company capable of designing a subsea part which met all their requirements. Such was

the disbelief among Houston-based execs at the multinational when told down the phone by a plucky Chirton engineer that the riddle had been solved, that a flight to Newcastle was promptly booked and plenty of scepticism packed for the journey across the Atlantic.

But the Americans’ doubts proved unfounded and Chirton now has yet another lucrative overseas opportunity in its grasp .

Morris says: “This job had been hawked around the world from Canada, Europe and everywhere else.

A recommendation came for us and we were able to machine the die and have it moulded and solve this problem that couldn’t be done anywhere else.

“The head engineers from Houston flew in to actually see the product themselves because none of their engineers could do it. One of our engineers, Tony, cracked it and on the back

Such was the disbelief among Houston execs when told down the phone by a plucky Chirton engineer that the riddle had been solved, that a flight to Newcastle was promptly booked SPECIAL REPORT | WINTER 14

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of that our order book is going to increase four-fold to our client, a German multifaceted industrial giant.

It is such international successes that have sped Chirton to the verge of major expansion of its HQ and put it on track towards exponential growth in the coming years.

The firm is a sub-contract precision machine shop which supplies to the subsea, oil and gas, aerospace and automotive industry - with clients in the latter sector including a supercar maker whose identity is shrouded in secrecy.

Its parts can be found all over the world in various offshore machines including sea ploughs, trenchers, sea bed pipe laying equipment and rigs of all descriptions.

The company was founded by engineer Paul Stewart - cousin of my guide Michael Morris - in 2003, with a handful of staff whose Wallsend-based employer had closed due to the owner’s retirement.

Stewart’s business based in a “500 sq ft shed” became a £1.7m-a-year enterprise by 2010.

Then came a raft of investment and a decision to take the company to the next level.

A number of family members were brought >>

Opposite, Paul Stewart, managing director, Chirton Engineering

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in to join the growing business and a new plant was found in North Shields, which is now home to 51 staff, an order book of £1.6million and an annual turnover of £4m.

Morris says: “In 2010 if a bomb had dropped in Aberdeen would it have hurt the business? Yes it would have really hurt us.

So being aware of that we decided to go to other sectors and limit our liability and exposure to world markets that we’ve got no control over. If they suddenly stopped oil production the whole industry could collapse, so we were looking at the aerospace, automotive and other industries that we could pass the skills over to. We now support everybody out there. We don’t have a product, we’re a bespoke engineering machine shop and we can deal with anything that comes our way.

“In oil and gas, our clients continue to push the technical boundaries required to go further from land and in deeper oceans.

“So they are designing machines that have to withstand the new stringent demands put upon them. So they have to have confidence in our parts.”

The company, which keeps most client relationships confidential, exported its first precision components to Norway, Germany and Holland, as well as China and Singapore.

It is also the machine shop of choice for a large US firm, for a major project in the Gulf of Mexico.

“We also continue to win work in the South [of England], convince the Norwegians that we’re as good if not better than them and win work from France,” says Morris.

“We’ve built the company on relations that enable us to take the business forward.

Our number one priority in doing that is our honesty.

“You might not always get it right and you have to be man enough to pick the phone up and be honest and more often than not they’ll understand.”

The French market is now Chirton’s biggest export territory. A Global French company has recently awarded the business for the supply of parts to the European & USA client base, this adds to the contract in place for the supply to the UK market and has Chirton as its UK machine shop of choice.

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“For us to win work from the French is a real achievement.”

Having quickly forged relationships with several major multinationals in the UK and elsewhere, Chirton is now faced with a similar stick or twist moment to that faced by Paul Stewart in 2010.

While the machine shop floor at Chirton’s headquarters is as bustling and noisy as a thriving firm’s should be, the back office is absolutely crammed with occupied desks.

In one room, perhaps the size of a modestly portioned CEO’s private office, are squeezed three desks each staffed by senior team members beavering away at papers and keyboards.

“We’re turning work down on a daily basis at the moment,” says Morris, who goes on to

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explain that space isn’t the only current factor holding Chirton back.

“The biggest problem on this site is power to the three units. We’ve nearly maxed it out.

In fact, we can’t really turn our machines off because when we switched them back on, the surge would probably put half the lights out in North Shields.”

But plans are on hand that will enable the business to accelerate its growth and continue to add to its already heaving order book.

Under its current four-year plan the business has a target of doubling annual turnover to £8m by 2018.

However, in recent weeks the firm has calculated that it will hit this target two years early on the back of soaring demand and plenty of emerging opportunities.

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INSIGHT

“We’ve got invitations from Copenhagen to meet reps of the oil and gas and alternative energy markets there to see if there can be any relationships built up.

“We’ve got an invitation to go to Canada, and also to Atlanta. We’re working with a client bringing a new part to market and it’s potentially worth about US$6bn to them in the US market alone.

“We’ve just got another order worth £225,000 from a Norwegian company. We were already pleased when we won it. And then they told us that was just for one vessel and that they are actually putting out 44 of them. So that could be worth a lot more in the future.”

With such burgeoning success underway then, the company’s impending move to a

Right; Chirton business development manager Michael Morris says the company invests heavily in the engineers of tomorrow

new significantly larger site can’t come soon enough.

Chirton will move from its current 16,500 sq ft home to an 80,000 sq ft site on the nearby Tyne Tunnel Industrial Estate later this year.

An influx of new employees will follow, as will the creation of a new 20,000 sq ft training academy on the site which aims to fight back against the engineering skills gap.

The North East Advanced Machining Academy will be operated at Chirton’s new home by training providers Tyne Metropolitan College, in partnership North Tyneside Council.A number of additional North East SMEs will also be involved.

The academy will be separated from Chirton’s factory floor by just a transparent wall, to enhance the sense of a ‘real work environment’ for apprentices.

“As well as tackling the wider skills shortage, the big spin off from the academy for us is the talent it will give us access to, with 50 apprentices going through the programme each year.”

In addition to the planned academy, Chirton runs its own apprenticeship scheme which plays a vital role in future-proofing the firm.

“We’ve got the A-Team here,” Morris says.

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We use the old buddy system of apprentices...they stay on the shoulder of the experienced guy and almost become a mini version of them for 18 months, so their skills are passed down “These are the top engineers with skills that have been learnt man and boy.

“But a lot of our engineers are in their late 50s and early 60s so we do have an aging workforce. They’ve served their engineering apprenticeships and gained these skills working hands-on, but we’re always after skilled people.

“We use the old buddy system of apprentices, where they stay on the shoulder of the experienced guy so he almost becomes a mini version of that person for 18 months. So all their skills are passed down.

“The cost and training and everything that goes into it is an awful lot, but we’re investing in the youth of today to become the engineering people of tomorrow. It’s a very simple way of doing things.”

Chirton’s keen focus on the skills agenda

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has not gone unnoticed in Whitehall, with visits from Nick Clegg, pilot schemes with the Department for Business Innovation and Skills and successful funding bids among highlights for the firm in recent years.

The business has twice bid successfully for a share of the Regional Growth Fund-backed Let’s Grow campaign.

In 2011 it invested £175,000 alongside the £75,000 of government funds it received from the first RGF round, creating 23 new jobs in the process.

Then last October a further £200,000 of RGF funding was leveraged, helping to support new equipment investment and job creation .

With plans to create numerous new jobs, skills and opportunities here in the North East in the future, few could argue that backing Chirton is a shrewd investment of government finance. n

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AMAP SHOWS WAY AHEAD ENERGY - RENEWABLE AND OFFSHORE

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Collaboration between academia on Wearside and industry is driving new and exciting offshore opportunities into the North East.

BQ reports on the University of Sunderland’s important role in helping some of the world’s biggest energy firms solve problems, access new markets and boost their profits

Not only has the design time for a pressure vessel been reduced by 90%, but we are able to design products that we couldn’t have done nine months ago

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There are many definitions of advanced manufacturing, but in one flourishing North East institution it revolves around innovation.

It is here that manufacturers are constantly encouraged to innovate in product design, apply innovation to the design of their manufacturing process and to the design process itself, and innovate to improve process performance once the product is being manufactured.

While the Institute for Automotive and Manufacturing Advanced Practice’s (AMAP) title implies its focus is purely on automotives, AMAP actually works across a number of sectors to assist this innovation.

AMAP, based on Sunderland’s Hylton Riverside, is part of the Faculty of Applied Sciences at the University of Sunderland.

To support innovation, the university interacts with its clients in a number of ways depending on their needs.

Interventions range from consultation with subject experts, through placements and internships to collaborative research and development via a number of mechanisms.

Research can seem a daunting task for many companies. But such fears are alleviated by the university by carrying out research on behalf of clients using its own internal expertise.

In some cases it also works with a company’s own employees to carry out the research via its professional doctorate programme.

Of course it may be more appropriate to recruit new talent and embed researchers, potentially using either CASE award or Knowledge Transfer Partnerships (KTP), within the client’s organisation in order to carry out research with that organisation.

Often these embedded researchers join the client company upon completion of the project in order to continue the good work they have been carrying out.

Within the offshore sector AMAP has worked with a number of clients.

When Wessington Cryogenics was seeking to move into new markets and needed additional skills to enable it to design technically challenging products, the university played a key supportive role.

Director Brian Bennett-Cowell describes the assistance provided as having transformed the company. He says: “Not only has the design

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time for a pressure vessel been reduced by 90%, but we are able to design products that we couldn’t have done nine months ago. We now have pressure vessels operating in every continent of the globe and are putting the larger competitors under significant pressure.

Wessington are now in a much stronger position design wise.”

On the back of its work with the university, the company has designed the first tank that can be lifted by helicopter.

Other clients such as Wellstream International, while always trying to innovate in product design, also sought to innovate in the way it designed products through the use of digital engineering technologies. A company spokesperson said at the time “Wellstream’s aim is to improve productivity and competitiveness by understanding and adopting the most appropriate engineering software solutions and by increasing skill levels in the use and application of digital tools across the organisation.”

The focus up until AMAP’s intervention had been on drawing and finite element analysis training. However, following a “digital needs analysis”, which looks at the how digital technology is applied within an organisation, the training was expanded across the company.

The improved use of SolidWorks, Cosmos, and Ansys enabled Wellstream’s engineers to innovate within its structural design and allowed Wellstream to explore new analysis and design models.

The result was an improved tendering process that provided existing and potential clients more detailed design information to aid their decision making process.

Both of these projects used a direct consultancy approach with experts from AMAP working closely with clients to ensure a successful outcome.

Of course this is not the only way in which the university interacts with its clients. Each year the Department of Computing, Engineering and Technology, to which AMAP belongs, seeks undergraduate and post graduate projects and placements.

During this time challenging projects are given to students to complete – for the mutual benefit of both the student and the client.

ENERGY - Renewable AND Offshore

One such project is European Greenblast – which is currently underway with the Shipbuilders and Ship Repairers Association (SSA). It involves an embedded post graduate student investigating secondary uses for recycled glass blasting media.

It is part of a European project involving ship builders across the EU and is part of their commitment to reduce the amount of material going into landfill.

It is anticipated that this will lead to

This model of professional and academic development has proven to be very popular with companies who cannot afford to give senior staff significant leave of absence to pursue their academic and professional goals further projects for embedded students at undergraduate and post graduate levels.

Similarly, the Poseidon project was a large collaborative initiative involving a number of partners from across Europe.

Their aim was to detect early signs of degradation within marine engine lubricant including soot, water, sludge and metal using a range of condition monitoring sensors and intelligent software.

The project was successful and BP – which supplied the oil – and AMAP are planning

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to develop a new project based upon the outcomes of the project using one sensor to detect any and all abnormalities within the oil within a laboratory environment.

This project will involve a senior member of BP staff engaging in PhD study at the university while continuing with their role in their business.

This model of professional and academic development has proven to be very popular with companies who cannot afford to give senior staff significant leave of absence to pursue their academic and professional goals whilst retaining the skills and new knowledge within their business.

In the meantime the university is developing a follow on project to take the Poseidon ideas to the next stage and develop a real-time on-ship condition monitoring system.

In addition, automated monitoring of engine conditions and the application of proactive maintenance strategies will be established that will increase engine reliability.

An increased component availability of 5-20% and downtime reduction of 30% can be expected. An almost total elimination of unscheduled interruption of service from lube oil failure can be expected.

The goal is to anticipate and prevent human and environmental risk, through enhanced engine protection (risk management). It is expected that a detection of more than 95% of sudden lubricant related problems in engines will be achieved.

There are many opportunities for software applications within the offshore sector. The University of Sunderland has a long history of providing leading edge software support to companies.

It is currently with SPX, a regional company specialising in bolted joint applications for oil and gas, many of which are subsea to develop maintenance software and asset management systems to monitor, advise operators and locate products worldwide.

The university, through AMAP, supports a flourishing offshore sector using a wide variety of strategies ranging from taught programmes to placements and collaborative R&D. And, harnessing its considerable skills base, it is playing a major role in maximising the returns of investment in innovation. n

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ENERGY - RENEWAbLE AND OffShORE

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safety fears over training shortfall Urgent action must be taken to educate ships’ captains about the risk of accidents at sea faced by offshore workers, warn industry specialists

Marine experts are calling for an immediate improvement to the training of ships’ captains in the offshore industry amid a series of accidents where human error has been blamed. They say skippers of boats transferring workers to offshore renewable energy facilities – including wind farms – often lack the necessary skills to ensure workers’ safety as they switch from vessels.

It has led to a series of accidents and near misses by those crewing ships miles out to sea.

The industry accepts there is a lack of specialist training programmes for those in such positions of responsibility – and is urging change be implemented without delay.

They say that usually where gaps in training provision are recognised, specialist training centres and industry regulators step in and new rules and courses are established.

But they accept there are times when issues of safety are thrown into quite stark relief

ENERGY - Renewable AND Offshore

and they appear from almost nowhere on the horizon. The offshore renewable energy industry has brought with it a steep increase in the number of people working offshore in often quite treacherous conditions and whose training requirements must be met – and to an extremely high standard.

Experts say one such area throwing up numerous challenges in this most technically advanced of ages – and one which has so far

gone unchallenged – is that of boat transfers, mainly within the booming offshore renewable energy sector. The safe transference from vessels is an essential skill and wide-ranging training courses have been established in recent times. For those required to step off a vessel far out at sea – for example, onto a wind farm – they say the needs of industry and individual has gradually come together in cohesive training. >>

The offshore renewable energy industry has brought with it a steep increase in people working offshore in often quite treacherous conditions and whose training requirements must be met

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Renewable UK (RUK) and Global Wind Organisation (GWO) – the two industry bodies responsible for safety – recently jettisoned their previously mutually exclusive programmes to formulate a single cohesive unit that gives people the skills and insight to work safely within this field both in the UK and worldwide.

But industry specialists say this only covers the training and safety of those being ferried to their destinations by others, but not of those captains ultimately responsible for the safe and correct positioning of vessels when they reach their destination.

This subject fell under the spotlight at the Renewable UK Health and Safety Conference in Birmingham last week where delegates spoke about the lack of formal qualifications possessed – or not possessed – by some, if not many, transfer skippers. There was a keynote speech by Captain Steven Clinch, Chief Inspector, Marine Accident Investigation Branch, which highlighted these issues as contributory factors in two recent accidents.

Over 300 delegates attended the conference which explored many issues, including; construction and contractor management, medical and occupational health, wave and tidal: traditional risks in a new environment, offshore wind and marine, organisational safety and human factors and topical industry developments.

Graham Johnson, Head of the Marine Safety Training Centre, at the world-renowned South Shields Marine School, a major faculty within South Tyneside College, said: “It is recognised that there has been a significant rise in near misses and accidents that have resulted in vessel damage.

“The cause, in the vast majority of cases, is human error.

“This is something that safety and training experts alike believe is avoidable and which must become an exception.”

“It is fact that a great number of skippers have come from the fishing or leisure industries where they have been crewing small vessels, often around 18m in length and of about 20 gross tonnes.

“This is unfortunate for an industry where in just a few years transfer vessels have not only become larger - often reaching 28m and 50 gross tonnes – but their operating systems and

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electronics have significantly advanced.

“These are major changes that must be addressed, but there is currently no training in place to re-train or up-skill these captains.

They are usually very experienced, but only within their narrow field.”

He added: “It is also true that their vessels are increasingly switching over to jet drives which are very different to handle and operate for a crew which has only had experience of propdriven vessels.

“A means to rectify this is simulation training, and indeed it has been identified as a valuable training method, one which is expected to be manipulated and used to great effect in offering a solution to this growing problem.”

In the North East, South Shields Marine School already uses the very latest high-powered simulators, capable of quite incredible graphics and real-life visuals of sea and port conditions.

They are used to train hundreds of seafarers each year in an array of techniques for dealing with the multitude of conditions they can

Marine School and the Marine Safety Training Centre (MSTC), by the banks of the Tyne at South Shields and which is also part of South Tyneside College, say this opens many opportunities to establish new and specific programmes which will in turn help raise their already high profiles, both nationally and internationally.

They say that, along with other UK maritime training centres, they will adapt and provide the necessary training that will eventually see skippers who lack the necessary experience gaining improved and vital skills, which in turn will benefit the entire industry.

However, they say that in an industry that is so fast-changing, it can ill afford to stand still and must remain alert to every new challenge and danger.

But they say issues around transfer skippers are not the first or only occasion in recent times that matters of safety have arisen and prompted calls for change.

Less than a year ago, Graham Johnson, Head

Experts, who fear their worst predictions of a major marine accident will come true unless improved training is implemented, predict that simulation will be the next big area for training expect to meet. Experts, who fear that their worst predictions of a major marine accident will come true unless improved training is quickly implemented, predict that it is almost certain that simulation will be the next big area for training. An example of the deficit in capabilities is of Transition Piece (TP) ladders.

These are the wind turbine supports of pre2012, were designed to take an impact of three metre tonne per second (MTS) as a oncein-a-lifetime occurrence.

Worryingly, measurements taken from some of the newer, larger vessels have measured seven mts per second impact. Clearly, this is a risk for TP, boat and crew.

Training establishments such as South Shields

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of School at MSTC, called for a review of the training standard within the marine safety industry for transfer from vessel to installation.

As things stood, individual training programmes carried out by RUK and GWO were incompatible and did not offer training in realistic conditions.

Mr Johnson said it was rare to witness transfer in near perfect conditions and insisted there was always a risk of bow waves from passing ferries and other vessels.

He said that transfer to or from a ladder to a vessel around Britain’s shores, and further out to sea in European waters, is far from routine and is almost always incredibly unpredictable.

Video footage from inside transfer vessels >>

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or from fixed cameras on installations has shown that transfers are taking place routinely in large wave conditions and that individuals are transferring without adequate training.

The MSTC say individual companies routinely ask for training in simulated but realistic conditions, yet until recently RUK and GWO had preferred, and indeed insisted on, training in safe and calm waters.

The MSTC specialises in the provision of offshore and renewables safety training and the centre attracts around 3,000 students year on year. Over 100 companies use the MSTC every year, which is testament to the high standard of training it provides.

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Facilities include an environmental pool used for survival training, an eight-seat helicopter escape module, and offshore platform boat transfer simulator.

Safety programmes are supplemented by high voltage, simulation and laboratory equipment which enables staff expertise in offshore safety and large power generation to create up-skilling programmes to meet generic and specific employer needs.

The courses utilise the training centre’s extensive and unique facilities in offshore safety training and maritime safety courses, including Working at Heights - Europe’s first offshore platform transfer simulator.

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In an era where the offshore renewables sector, as well as those of oil and gas in the North Sea, is experiencing exceptional levels of growth and investment, more and more people are seeking advice about training and opportunities to work offshore.

Experts now say it seems realistic, and indeed essential, that not only do they receive the best possible training, but so too do those responsible for their safe arrival at, and departure onto and from, offshore facilities.

For further information on courses contact the Marine Booking Centre on 0191 427 3772 or email marine@stc.ac.uk. Alternatively you can visit www.stc.ac.uk for more information. n

ENERGY - RENEWAbLE AND OffShORE

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