Vulcan SFM, Sheffield Forgemasters’ offshore specialist, has recorded orders worth £12.5m in the 2009/2010 financial year.
The demand for its products has reached unprecedented levels now that oil prices, decimated in the 2008/2009 global economic slump, have returned to more than $75 per barrel from a $40 per barrel low. This has encouraged oil companies to reinvest in production, with the company anticipating orders of £22m over the next 12 months.
Oil field developments in the North Sea account for the bulk of Vulcan’s orders, with oil companies requiring high-strength structural components to replace ageing oil rigs and develop new fields. New markets off the East coast of Africa and in South America are also providing high levels of demand.
Paul Mockford, design director at Vulcan, said: “The sheer scale of demand for Vulcan’s safety critical offshore components is unprecedented and we are looking at a realistic doubling of order intake over the current financial year.
“There was a very lean period in 2008/2009, when orders reduced dramatically, but we knew that this was due to the economic downturn. However, because of continued global demand for energy, and oil in particular, which is outstripping supply, we remained confident that the market would return.
“We have taken four orders for North Sea platforms in the first half of 2010 which is an extraordinary intake in a relatively short period for these large, structural components. This gives an indication of the level of requirement in the market and with oil prices predicted to continue rising steadily, this demand will almost certainly increase.”
Vulcan SFM is the brainchild of Forgemasters’ chief executive, Graham Honeyman and was launched in 2006, one year after the company’s successful management buyout to service the offshore market, incorporating the company’s former OSCAL brand.