Oil prices drive demand for Vulcan
VULCAN SFM, Sheffield Forgemasters’ offshore specialist, is seeing increasing demand for its products as oil prices soar.
The operation has recorded orders valued at £12.5m in the 2009/2010 financial year and is anticipating further demand 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.
Vulcan, which has won £22m of orders which will be carried out over the next 12 months, said demand for its products was being driven by rising oil prices.
New markets off the east coast of Africa and in South America are also providing 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.
“With a rise in oil prices, operations in the North Sea, and worldwide, are increasing rapidly as more reserves are discovered, prompting oil companies to invest quickly in new plant and equipment to capitalise on this resource.”
Mr Mockford said Vulcan had taken four orders for North Sea platforms in the first half of 2010.
Vulcan SFM designs and develops cast nodes, a crucial component for joining the many tubular elements which make up the superstructure of fixed platform oil rigs.
In additional to cast nodes, Vulcan is securing contracts for mooring and tethering components used by floating production platforms in the Gulf of Mexico, the Far East and off of the East coast of Africa.
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.
