North East specialist firms help stem oil leak

EQUIPMENT manufactured by North East companies is being used to help stem the Gulf of Mexico oil leak and the tighter regulations expected to follow on from the disaster may lead to increased orders for the region's specialist sub-sea companies.

SMD (Soil Machine Dynamics) Ltd machinery
SMD (Soil Machine Dynamics) Ltd machinery

EQUIPMENT manufactured by North East companies is being used to help stem the Gulf of Mexico oil leak and the tighter regulations expected to follow on from the disaster may lead to increased orders for the region's specialist sub-sea companies.

Almost 50 days after the Deepwater Horizon rig exploded killing 11 men, work is still going on to stem the flow of oil from BP, which has already polluted hundreds of miles of American coastline.

Underwater robots made by Tyneside company SMD and North Yorkshire-based Perry Slinsgby are currently being deployed to help stem the leak.

The two companies – and a raft of others in the region – have developed world-leading equipment for the recovery of underwater oil and gas reserves and BP, which has spent millions attempting to stem the leak, has turned to North East technology to tackle the oil flow.

Andrew Hodgson, chief executive of Newcastle-based SMD, said: “We can see our vehicles on the live feed being used to help with the task of quelling the oil flow.

“We do not want to make light of what is a situation of major concern, but it does highlight the world-leading levels of technology that have been developed here in the region.”

Mr Hodgson is also the current chairman of Subsea North East, which represent the region’s sub-sea companies, and believes the long-term knock-on effects of the leak will lead to an increased demand for the technology.

However, in the short to medium-term there may be some negatives for North East firms, with almost all of the region’s sub-sea firms having a presence in the Gulf of Mexico.

He continued: “Our concerns are what will happen six months down the line if this moratorium on drilling in the Gulf continues.

“If that does continue then sub-sea equipment will come on to the market and this will have an impact on new orders for North East firms.

“This is a concern but it is not likely to have an immediate effect. However in the long term it may well be a benefit to North East companies.

“There is likely to be more inspections on the back of tighter regulations. This will lead to a greater demand for highly integrated products and that falls within the technical competence of the firms within the region.

“Anything that increases the integrity requirements of sub-sea operations will be a good thing for the players in our region.”

The region’s sub-sea sector, which includes major global companies such as Duco, Wellstream and BEL Valves, all of Newcastle, is at the forefront of technological developments.

There are around 50 North East firms employing 5,000 people in the sub-sea sector and as oil companies look to secure more reserves from under the ocean floor, there has been an increasing global demand for the region’s expertise.

But the spill in the Gulf has highlighted the dangers concerned and US President Barack Obama has issued a moratorium on any future drilling in US waters.

George Rafferty, chief executive of Durham-based NOF Energy, said: “There may some negative impact on regional companies in the short term but in the long term increased regulations of sub-sea activities will boost regional companies who are world leaders in this field.”

 

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