Ten years ago Port Clarence was an empty shell, now it’s a hive of activity
THE buzz of activity at Teesside’s Port Clarence offshore yard is a clear indication that the good times are back in the region’s oil and gas sector.
Almost ten years ago the former Kvaerner yard closed its doors and laid off its 900 workers as the order book ran dry.
Just months later the site’s plant went up for sale lock, stock and barrel, leaving the yard an empty shell and shadow of its former self.
Today the site is a hive of activity - with plans for growth and investment on the cards, thanks to Wilton Engineering Group which bought the yard from ship builder Swan Hunter in 2006, moving its operations from Hartlepool to the 30-acre site last year.
George Rafferty, chief executive of NOF Energy - the organisation representing companies in the sector - says there’s just cause to be optimistic.
“Oil and gas will remain a key component of the energy mix for the foreseeable future,” he said. “While we need to look to alternative options. There are still huge opportunities in oil and gas.”
“The North Sea is a mature industry, there is still around 25 million barrels of oil to be removed - about the same volume that has already been extracted,” he added.
Found in smaller pockets and deeper locations, he said the skills and technology are continuing to develop to access this rich resource at deeper and deeper depths.
“Globally,” he added, “areas such as the Far East, West Africa, Canada and Australia are some of the key locations for development.”
Only last week the first gas from Total’s Jura field arrived with the North Sea development one of the key new projects to boost the company’s oil and gas production in coming years.
Growth in the sector is now driving development at Wilton Engineering Services’ Port Clarence yard.
It recently acquired Project Design and Management Services (PD&MS) of Aberdeen to expand its capabilities.
And the deal sees the expanded company - which quadrupled its staffing to 200 during the last three years - grow its workforce to 250 and almost double annual turnover to more than £30m.
“It’s very satisfying to see the yard up and running again,” said Bill Scott, who founded the company in 1994 with fellow director Steve Glenn.
“It was sad to see the demise of the facility, driven by market conditions.
“Our ambition now is to grow further.”
Wilton Engineering specialises in bespoke fabrications and associated services for the oil, gas and petrochemicals sectors.
Its recent acquisition has increased its capability for design and detailing, meaning it can now handle every part of a project’s development from design through to manufacturing and installation.
Mr Scott admits careful planning, targeting particular contracts, and a bit of luck, helped the company weather the oil and gas recession of the late 1990s.
“This will always be an industry that is cyclical and we were careful in the jobs we went for,” he said.
“We kept ourselves smaller and leaner so we could switch markets quickly.
“But despite that, we’ve always been on a growth pattern. But it eventually became a case of do we stay as a relatively small operator, or grow substantially.”
Taking what Bill describes as a “leap of faith” the business decided on the latter, moving to bigger premises at Hartlepool’s Tees Bay Business Park - before relocating to the Tees.
And it’s a decision that’s paid off.
It has just secured a contract which will keep its order book busy for more than a year. It is working on a contract to build a 1,650 tonne structure to sit on the back of a ship to lay sub-sea pipework all over the world.
And it has plans to dredge the River Tees alongside its yard to allow it to bring in larger ships for future contracts.
The oil and gas sector currently accounts for around 75% of Wilton Engineering’s workload - with the other quarter focussed on petrochemical and liquid natural gas projects.
Mr Scott says the North Sea continues to be an area of huge opportunity.
“There are large operators out there with aging assets that need servicing,” he explained. “But also new companies looking to bring up deep oil reserves which were previously thought too expensive to access.”
But new markets and new sectors are creating new opportunity for the firm and others in the engineering sector.
“The 2012 Olympics presents a great opportunity,” he said. “Government plans to build two huge aircraft carriers will create a huge amount of work. Plus there’s going to be future opportunities in the energy sector with nuclear, tidal and wind power.
“It’s important to gear yourself up for what’s coming and keep one step ahead.”
He added: “The signs are there the oil and gas sector is set for growth for at least the next five years, if not the next ten or more.
“Our long-term strategy is for investment in the yard, to increase the number of people we employ and maximise the site we have here.”