A chance to lead way in subsea area.

Byline: By Howard Walker 

A drive to place the North-East at the centre of the rapidly expanding multi-billion pound subsea oil and gas industry will be launched tomorrow.

A new business group ( Subsea NE ( is being set up to harness the region's expertise in the sector, one of the fastest growing industries in the UK.

North-East companies already bring in an estimated pounds 500m-plus from the subsea industry each year. Now it is hoped the formation of Subsea NE, which will bring together firms in the sector to work on developing new opportunities, will further boost the region's economy and create and safeguard jobs.

Chris Braithwaite, chief operating officer of Wallsend-based oil pipeline specialist Wellstream, has been appointed chairman of the new group. He said: "Almost 100 companies in the North-East operate in the subsea sector, particularly in engineering and the manufacture of subsea equipment.

"We've estimated half of those companies have a combined annual turnover of pounds 500m.

"The whole cluster contributes substantially to the local economy. However, many are unaware of the strength, scope and size of this sector and we believe that by encouraging collaboration there is real potential to build a centre of excellence in the region."

As oil and gas supplies in the North Sea begin to dwindle, energy companies are increasingly turning to subsea operations to extract remaining reserves economically.

DTI statistics show subsea completions were responsible for 39% of oil and 27% of gas production in the UK in 2004. At tomorrow's launch, representatives of firms, academic institutes and the public sector will find out how, under the Subsea NE banner, they can work together to take advantage of the region's strength, grow the science and technology base and address skills shortages. Subsea NE is closely affiliated with Northern Offshore Federation (NOF), an industry body representing over 200 firms operating in the region's oil and gas industry. It also has links with national organisation Subsea UK which champions the sector UK-wide. Subsea UK chief David Pridden said it is looking to create a global subsea centre of excellence.

He said: "While the biggest cluster of companies in the sector are based in Aberdeen and it may seem the logical location for this centre, the North-East plays a key role and must be part of such a development."

NOF director George Rafferty said expenditure in the sector is expected to almost treble in the next few years: "International opportunities will be key to those trends and we want North-East companies to benefit."