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UK-based company win multimillion pound contract with Galloper wind farm

A UK-based company, James Fisher & Sons, has won a multimillion pound contract to work on the Galloper wind farm project. The announcement is expected to lead to the creation of 100 jobs on the east coast, including up to 50 offshore technician positions, and approximately 30 onshore and offshore staff will also be required.

The company will be responsible for delivering a range of offshore and marine services to aid in the successful completion of the Galloper windfarm, which is planned for Lowestoft, Suffolk.

Personnel from James Fisher will be assisting with a number of different support arrangements during the construction of the site including vessel refuelling, diving services, the operation of remotely operated vehicles, emergency responsive services, construction site set up and providing crew transfer vessels. The contract is worth £25 million to the company, which specialises in working with the marine, renewable energy and gas and oil sectors.

Commenting on the new contract, Nick Henry, CEO of James Fisher and Sons, stated:

“We’re delighted to be working with Galloper Wind Farm Limited on this exciting and challenging project. We are bringing together a range of services under one contract which enables us to focus on driving operational efficiencies and reducing risk on behalf of our client, through the integration of these services.”

Planning permission and additional investment

Permission for the building of the windfarm was first granted in 2013 and it is an extension to the already existing Greater Gabbard Wind Farm. In October 2015, RWE Innogy announced a financial close for the project and stated that Siemens Financial Services, Macquarie Capital and UK Green Investment Bank would become 25% equity owners in Galloper Wind Farm Limited.

Construction work and project completion

Work on the offshore construction is scheduled to begin in June 2016 and it will be completed in 2017.

Once complete, the Galloper windfarm will have 56 wind turbines that will have the capacity to produce 336 MW of power, which is enough to fuel more than 300,000 homes. 56 subsea array cables will be built under the sea to link the turbines to the platforms, and they’ll be one offshore substation.

It’s thought 700 jobs will be created during the construction stage, and approximately 90 operational positions will also become available once the construction is complete.

The opening of the windfarm is set for March 2018.

Oil and Gas survey shows mixed fortunes for industry

The latest activity survey from Oil and Gas UK has shown mixed fortunes for the sector in the UK.  The statistics show a campaign to improve efficiency and production, and to reduce industry operating costs has been successful.

According to the report, operating costs in the sector have been lowered by a third, costs of exploration are predicted to reduce further and the sector has been boosted by a 10% increase in oil and gas production, but the survey revealed some negative aspects for the industry as well.

North Sea Exploration at record lows

While costs for exploring the North Sea have been reduced by 40%, the survey also demonstrates how exploration is now at record lows.

The lack of surveying in the oil and gas sectors in the UK has caused concern in the past, and a number of initiatives have been announced to encourage more exploration but they do not appear to be reversing the trend.

Lack of Investment

The report also noticed a lack of financing for the creation of new projects, and Oil and Gas UK are now urging the government to take measures to improvement investment levels.

Chief Executive for Gas and Oil UK, Deirdre Michie, has called for action to be taken to encourage government, the gas and oil industries and regulators to work together in order to make the industry more competitive and attractive to investors.

Michie also urged the government to reduce the headline rate of the special taxes paid by the industry and for steps to be made to improve the way the Investment Allowance is used in order to help pave the way for securing energy supply in to the future.

Price Fall

Prices for gas and oil also continue to be on the wane and total revenues have decreased by 30%.

Based on current prices, the activity report highlighted concerns that around half of UKCS oil fields could be operating at a loss, which will further prevent fresh investment into exploration.

Commenting on the falling prices, Deirdre Michie said

“The UKCS is entering a phase of ‘super maturity’.  While the industry’s decades of experience provide great depths of knowledge and expertise which can be applied to recover the still significant remaining resource, the report highlights the challenges that the falling oil price poses in our capability to maximise economic recovery of the UK’s offshore oil and gas.”

The report also details the rapid increase in the decommissioning of fields and the fall in sanctioned capital investment

Manufacturing close to stagnation rates

Manufacturing has hit a 34-month low, according to figures from the Purchasing Managers Index (PMI), which takes its data from more than 600 manufacturing companies.

The UK manufacturing PMI now stands at 50.8, which is only just above the stagnation mark and output has experienced a sharp decrease. The fall comes just a month after an increase of the January manufacturing PMI to 52.9, which was due to a surge in domestic orders.

The slump is attributed to a slowdown in the consumer and investment goods market, and capital and consumer goods are also in decline.

Commenting on the new figures, Rob Dobson, a Senior Economist at Markit, said:

“The near-stagnation of manufacturing highlights the ongoing fragility of the economic recovery at the start of the year and provides further cover for the Bank of England's increasingly dovish stance.

"The breadth of the slowdown is especially worrisome. The domestic market is showing signs of weakening while export business continued to fall."

“Price pressures also remained firmly on the downside, with the survey signalling input costs falling at a double-digit annual pace and average factory gate selling prices showing a further decline. A lot of this is driven by the ongoing weakness of global commodity prices. However, there are also signs that weaker growth is driving up competition between manufacturers to secure new business and among their suppliers too.”

Nevertheless, despite the decline in February’s results, the PMI still remains in positive figures and previous industry surveys show that manufacturers are positive about the future prospects.

Employment slump and Exports

Employment in the manufacturing sector also fell, with the figures for February showing a reduction for the second successive month, however, the fall was not significant

Exports were on the decline with manufacturers stating there is a slowdown in orders from key locations such as Russia, Brazil and mainland Europe, and there was low demand from the domestic market also.

Exchange rates, Brexit and the manufacturing sector

Many manufacturing firms have expressed concerns over the volatility of exchange rates and the impact these will continue to have on the sector. Moreover, with an EU referendum set for June, this will lead to more uncertainty over the future of exports.

The future of the UK export market will remain unclear while the outcome of the Brexit vote is unknown. In the meanwhile, analysts state that if the UK public does vote to exit the EU, this will have a significant impact on many UK manufacturing sectors, including the chemical, food and beverages industry.

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