Tyneside's subsea industry owes a debt of gratitude to Teesside,” says the man who helped turn the North East into a global powerhouse in the sector.
Charles Tompkins has been at the forefront of underwater engineering for over 30 years and in that time has seen the subsea sector become one of the fastest growing – one that is now worth £9bn a year to the UK economy.
Whilst it was mainly Tyneside companies which developed the skills and technologies to tackle subsea challenges the Tees Valley has a cluster of contractors operating successfully across the globe.
“They (Tyneside) make them, we apply them,” says Tompkins. “It really is a symbiotic relationship.”
Tompkins formed CTC Marine in Darlington in 1993. Fifteen years later it was an £85m-a-year company with five ships, 250 staff and an operational fleet of 12 seabed machines – all made by SMD of Newcastle.
In Darlington and the wider Tees Valley there are now a host of subsea contractors and innovators including Modus, Reef Subsea, and Subsea Innovation with affiliations to CTC.
Tompkins said: “It’s a perfect example of the cluster effect. It’s fair to say we are responsible for helping provide the skills necessary to develop some of the companies that are based around here.
“Between them all they generate substantial revenues and employ hundreds of people. From a regional perspective there are strong links between the companies on Teesside and those on Tyneside contributing to an even larger, world-leading North East subsea cluster.”
The North East’s subsea engineering cluster is one of the region’s recent success stories. In the last 30 years it has grown from scratch to one employing 15,000 people with annual revenues of £1.5bn from over 50 firms.
It began by helping develop the technologies required to recover oil and gas reserves from production facilities on the seabed.
These technologies have been applied to the telecommunications sectors, are being applied to the offshore wind market and will in the future become increasingly used in mining for subsea minerals.
One of the leading lights is SMD of Wallsend which is at the forefront of developing remotely operated vehicles (ROVs), which can plough trenches and bury cables and pipes under the ocean floor.
Tompkins’s ties with SMD and Tyneside stem back to the 1980s and the birth of the global subsea industry. He explains how he was working in the region’s offshore fabrication and heavy construction sector when he came across technology coming out of Norway.
“The Norwegians had managed to develop subsea wells, stepped out some 20 kilometres from the main platform. This was a quantum leap, a completely new market. I reckoned it was unlikely to be successfully operated by the oil company giants as they are geared up for billion dollar contracts.
“They wouldn’t be efficient and effective enough to operate successfully in markets worth hundreds of millions of dollars. This meant there was a new requirement and this presented a significant opportunity.”
In 1986 Tompkins established Northern Ocean Services (NOS) to install subsea flowlines (pipes) and cables and develop the technology for installing hardware.
Power and telecommunications cables also had to be buried under the sea floor which saw Tompkins’s original idea shift and crystallise into a new form.
NOS’s first contract was a cross-Channel power cable. “This was an entirely new market and we were introduced to Alan Reece of SMD to develop a subsea trenching machine.
“We outlined our requirements and they met our needs and it was the start of an excellent relationship which has benefited both parties over the years.”
Over the next few years this market grew rapidly and NOS was bought by a larger player with Tompkins leaving to form his own consultancy in Darlington.
Charles Tompkins Consulting – later CTC Marine – quickly grew with support from telecom giant Alcatel before hitting an “exponential” growth curve in the mid-90s.
Tompkins continued: “When the banks entered the market they required much more robust and reliable telecommunications which meant more of the cables were buried under the ocean floor.”
CTC completed contracts for cables running under the Indian Ocean from Singapore to the UK, and from Australia to New Zealand, Hawaii and Vancouver.
Prior to this, many cabling jobs were completed by divers and crude ROVs, but CTC and SMD revolutionised the market.
“The technology and techniques we were developing transformed subsea cabling. We needed technology which could plough and bury cables at the same time,” he said.
Working with SMD, CTC developed a bespoke trenching and burial machine, one which reduced task completion time by 70% and halved the cost.
CTC had not lost focus on the oil and gas sector though, and a prototype for relating the cabling technology back to the oil and gas industry couldn’t have been better timed.
Come the dotcom crash at the turn of the Millennium, CTC was able to refocus from an industry which had ground to a shuddering halt into one that was booming once more, after the early 80s oil price slump.
Between 2002 and 2007, CTC grew revenues from £50m to £80m and helped in the development of a substantial local supply chain in the region.
It was spending £10m a year on new product development, but it still wasn’t enough and it was courted by Deep Ocean – a suitor with much deeper pockets.
In the 1990s Tompkins helped the former Teesside Development Corporation create the Tees offshore base on the former Smith’s dockyard in Middlesbrough which is a base for subsea construction vessels, logistics and equipment. At this time Teesside was competing with Tyneside for inward investment from US flexible pipeline firm Wellstream, which the latter won.
Wellstream (now GE Oil and Gas) forms part of a cluster of subsea companies on the River Tyne, which includes SMD, IHC Engineering Business, which makes ROV and offshore structures, BEL Valves and umbilical firm Technip Duco.
Since CTC’s purchase by Deep Ocean new companies operating in the subsea contracting sector have emerged. Some formed by CTC staff, while other firms are run by former CTC staffers.
Modus Seabed Intervention is run by Jake Tompkins and Nigel Ward who had worked together at CTC (see panel).
Former CTC Marine managing director Daryl Lynch left CTC to become managing director of Reef Subsea and Umbilicals of Stockton.
Also in Darlington is Subsea Innovation, a subsea equipment and services company. It is run by Martin Moon who was previously operations director and interim managing director at CTC Marine.
Many of these businesses are now positioning themselves to take advantages of new opportunities in the offshore energy sector.
Tompkins continued: “The industry is different now. Energy security and the oil price are driving the need for more advanced methods of recovery in deeper waters. Then there are the opportunities with offshore wind and tidal and the good thing for the North East is that they involve related technology to offshore oil and gas.
“But we do need a new approach as the methods used for oil and gas are too costly for offshore wind. There is going to be a huge investment in equipment which will all be good for the subsea industry.
Tompkins, who is non-executive chairman of Modus, said: “At the height of our growth CTC produced lots of skilled engineers on Teesside. We were attracting people from all over the UK, France and India. Our staff were faced with exciting technological challenges on a daily basis.
“With the development of the Tees Valley subsea cluster engineers now have career mobility and this makes it more attractive for skilled people to come to the North East.”
“We recently recruited a skilled aeronautical engineer from Rolls-Royce, attracted by the ground-breaking technological challenges we face.
“Teesside now has some of the best companies in the contracting sector. Teesside has always been the poor relation, but Tyneside owes a lot to Teesside.
“In seabed intervention technology and operation the North East is still the industry leader.”
ONE Darlington company is using its skills as a subsea contractor to win work to clear unexploded ordinance in the North Sea to allow for the safe construction of offshore wind farms.
Modus Seabed Intervention was established by Jake Tompkins and Nigel Ward in Darlington in 2008 and has since grown to a business generating revenues of £15m a year with 50 staff.
In recent weeks it has secured work to use its latest fleet of machines to tackle the problems caused by the tonnes of mines and bombs littering the seabed.
Jake Tomkins is the son of CTC Marine founder Charles Tomkins and worked at CTC with Ward before they left to found Modus.
It operates in the subsea oil and gas and offshore wind sectors, with revenues split evenly between the two.
It has completed over a dozen offshore wind contracts and recently secured a multi-million pound deal to supply trenching and cabling equipment to a wind farm off the Dutch coast.
Modus recently demonstrated its commitment to be at the forefront of seabed intervention technologies with the creation of a new Autonomous Underwater Vehicles (AUV) division.
This has seen it launch an investment programme into a planned fleet of AUVs to be utilised for survey and inspection across the offshore field development life cycle.
This division is headed by Richard Hill, the Royal Navy’s former officer in command of fleet unmanned underwater vehicles and it will work with its partner to clear offshore Second World War ordinance.
Modus also has a fleet of ROVs, all constructed by SMD of Wallsend, which are able to provide sophisticated trenching and cable burying operations, construction support, inspection, repair and maintenance operations to depths of 3,000 meters.
AUVs tend to operate independently in shallow waters, without an umbilical support to mother vessel which is a feature of ROVs.
One AUV will normally cost £1m, compared to around £3m for a ROV.
Modus has over 100 companies feeding into its supply chain with three-quarters of these being based in the North East.
But like many in the sector it struggles to recruit enough skilled engineers, despite the subsea cluster on Teesside and Tyneside providing a strong skills base.
Consequently Modus is in talks with educational providers and industry partners to establish new educational facilities in the region to address these issues.
Modus has focused the business to capture work in all segments of the offshore industry – preplanning geotechnical surveys, construction and inspection and maintenance
It is planning for rapid growth with the global subsea sector set to quadruple in size to ï¿½85bn a year by 2020.
It operates in all major basins in Europe the America and West Africa and is now looking to open an Asian office.
Jake Tompkins said: “We are determined to be at the forefront of technology development that enhances efficiency and flexibility for clients requiring subsea construction, inspection and maintenance support services.”
As well as its Darlington headquarters Modus has an operational base on Teesside giving it excellent, and speedy access to the North Sea.
George Rafferty, chief executive of NOF Energy, said: “The Tees Valley is well-represented in the region’s subsea sector by a group of companies that are continually innovating and have a global reach.
“The River Tees is an ideal hub for subsea activities in the south of the region and companies have utilised its accessibility, its depth and its location to deploy its fleet of exceptional subsea technology.
“As the energy sector continues to grow, through the discovery of new hydrocarbon fields, the exploitation of hard-to-reach resources in existing locations and the transference of skills and technologies to the offshore renewables sectors, companies operating in the subsea sector have a positive future ahead.”