A survey of its members by Subsea found that around 90% of respondents have seen sales fall in the last 18 months since crude prices slumped from more than $100-barrel.
Of those, 28% saw sales drop by 30-40% and a further 28% have lost half their revenues with sales decreasing by 50% or more.
This means sales have fallen by at least 30% for more than 6 in 10 Subsea UK members.
Subsea UK’s 300-strong membership, which represents the majority of the subsea companies in the £9 billion industry, were surveyed to provide evidence-based insight into the impact of the oil and gas downturn
Almost 6% reported no impact on sales and almost 4% have seen an increase in revenues.
Most Subsea UK members (around 80%) said they felt that the ‘financial institutions have lost faith in the sector.’ However, only 5.7% were looking to refinance and 7.7% are actively seeking new investment.
Almost 70% of companies surveyed were not actively recruiting and 28% were recruiting fewer people than they were in 2015. More than 20% of respondents said that they were still employing apprentices to support their business, however recruitment on the whole has dropped, with only 8% of companies reporting that they are looking to employ more people than they were 12 months ago.
Underwater technology, systems and processes help recover more hydrocarbons from the North Sea since the eighties. The skills and expertise honed in the UK have led to the creation of an industry which employs around 50,000 people across the country.
Neil Gordon, Chief Executive of Aberdeen-based Subsea UK, said: “The decline in oil price and subsequent industry-wide downturn has seen a massive reduction in CAPEX and OPEX budgets worldwide which have impacted on the subsea sector, where we are seeing job losses and the collapse of companies, putting the UK sector’s enviable world-leading position under threat.
“The findings from our survey underline the negative impact on revenues and recruitment but they also reveal positive signs of the sector adjusting and adapting to the lower for longer oil price environment which will ensure we are well-placed for the future.”
The subsea sector’s role in extending the life of the North Sea and maximising recovery of reserves is vital. But, with more than half of the revenues generated attributable to international sales, Gordon said that the sector’s success is based on its ability to maintain and grow its exports, which currently represent a third of the global market share.
Some 80% of respondents hope to drive growth by increasing overseas sales and exploring new markets with a focus on the Asia, the Middle-east, North America and Africa. Other countries of interest are Australia, China, Brazil and Norway.
However, more than 44% of respondents said that the ‘lower for longer’ oil price has led to the industry ‘becoming more receptive to new ways of working’ and adopting different techniques and innovations.
Almost 80% of respondents are still investing in new technology and see this as an area of focus in the long-term to secure future growth.
Specific technologies, which will have most impact in the future, mentioned by respondents were subsea processing and storage, condition monitoring / inspection, repair and maintenance technologies, decommissioning technologies, data gathering and interpretation technologies.