Subsea UK is warning oil and gas companies against the temptation to put investment in research and development on hold as the industry begins to feel the effects of oil-price falls and the credit crunch.
The body championing Britain’s subsea industry – which employs 40,000 and contributes some £4.5billion annually to the UK economy – fears that firms may be re-considering their R&D budgets.
Alistair Birnie, chief executive of Subsea UK, said: “A decline, even temporarily, in research and development activities could have a devastating effect on the industry and ultimately on security of supply.
“With oil and gas production taking place in more complex, challenging and deeper-water environments, the need for new technology to successfully extract reserves is critical.
“If the UK is to hold on to its world-leading position in subsea, we must have technology in all stages of development.
“The creation and commercialisation of new smart subsea technologies will have an impact on our ability to secure a major share of the predicted £41billion global market in 2011.”
Subsea is said to be rapidly becoming a technology of choice for the exploitation of reserves in mature offshore hydrocarbon provinces like the UK and deepwater environments around the world.
Mr Birnie added: “Subsea technology is one of the great successes of the oil and gas industry in recent years, but its future development could be at risk.
“The dramatic change in oil price, coupled with a cost base which has risen equally dramatically in the last few years, will be forcing companies to reassess their business priorities and their budgets.
“At a time of escalating costs, we need more than ever to examine how technology can play a role in delivering improved value while enabling an increase in production.”