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Forgemasters records unprecedented demand for offshore products

10 August 2010

Vulcan SFM, Sheffield Forgemasters' offshore specialist, has recorded orders worth £12.5m in the 2009/2010 financial year - and anticipates orders of £22m over the next 12 months.

Vulcan SFM, Sheffield Forgemasters' offshore specialist, has recorded orders worth £12.5m in the 2009/2010 financial year - and anticipates orders of £22m over the next 12 months.

The demand for its market leading 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, encouraging oil companies to reinvest in production.

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 for Forgemasters' unparalleled experience.

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.

"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 builds on Forgemasters' 25 year history in offshore engineering and carries its unique experience in the pioneering design and development of cast nodes, a crucial component for joining the many tubular members which make up the superstructure of fixed platform oil rigs.

Paul added: "Sheffield Forgemasters developed cast nodes for use in offshore structures in the 1980s and we now have a unique track record of supplying large, structural castings for safety critical applications to the offshore oil and gas industry worldwide.

"We carry out the detailed design of these items and work very closely with the deck or jacket designer to ensure that our components are designed for the huge loads placed on them both during installation of the structure when our castings can be used for lifting in excess of 10,000 tonnes, but also during the lifetime of the structure as these components form an integral part of the structure."

The supply of castings and forgings to the offshore sector is a core service of Vulcan SFM. 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.

It is also capitalising on growing demand for forged, high fatigue-resistant joints for the riser systems which span from the sea bed to the production platform and transport the raw material.

Paul said: "Vulcan's products are used in some of the harshest conditions in the world, including deep water applications. To withstand such continual stresses over long periods of time requires the highest level of engineering expertise and there are few companies in the world that can offer the same track record in this market as Sheffield Forgemasters."

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.