Entrepreneurial subsea companies have a real opportunity to seriously increase their value in the years ahead, according to Colin Welsh of Simmons and Company International.
The corporate-finance expert for the energy industry will encourage independent British subsea firms and their backers to invest in growth when he gives an opening presentations at Europe’s largest subsea event.
He will tell delegates at Subsea 2011 today, in the Aberdeen Exhibition and Conference Centre: “With demand for oil and prices rising and current producing fields declining, the fields yet to be developed are largely going to be in deepwater environments.
“The opportunities for the subsea industry are greater than ever before, and now is the time for companies operating in that sector to position themselves to take advantage of the growth coming their way.”
Global capital expenditure in oil and gas infrastructure is expected to exceed £279billion in the next four years, with 40% of that coming from deep or ultra-deep areas.
Mr Welsh believes subsea service companies should be looking to drive up the value of their business by investing in additional capacity and services and ensuring they can cover key growth markets, adding: “As spending increases, the market revenue will grow and margins will improve as spare capacity falls.
“This visibility of this growth potential is driving heightened interest in the sector from an investment and mergers and acquisitions perspective.
“To take advantage of the opportunities, companies need to have good management and a robust balance sheet. Those who do will make a lot of money over the next few years.
“There are a lot of smaller companies operating in the subsea segment and doubling or even tripling their revenue over . . . three of four years is not an impossible target for those that focus on developing their services and technologies in key deepwater markets where activity is set to explode.”
Organised by Subsea UK, the conference, is expected to attract more than 2,000 delegates.
It boasts an impressive line-up of the UK’s leading subsea industry figures. Tonight sees the subsea awards dinner, while the exhibition showcasing the best of British subsea talent and technology continues again tomorrow.
Alistair Birnie, chief executive of Subsea UK said: “This year is set to be our best since the event was established in 2004. These are exciting times for the subsea sector and our aim is to help member companies take advantage of the global market to create value for them, their stakeholders and the UK economy.”
Sponsored by Shell and featuring its subsea head, Frank Bee, the conference will cover a wide range of topics.