UK’s best can still produce the goods

Earlier this year The Engineer joined news organisations from around the world in baking desert heat for a milestone event for the Middle East’s energy sector, the official inauguration of the Dolphin Gas Project in Qatar.

Even by the standards of the region the Dolphin Project is a bigee, producing and transporting two billion cubic feet of gas from Qatar’s offshore fields to customers in the United Arab Emirates and Oman.

We all know only too well how the price of gas has gone through the roof recently, so Dolphin is great news for Qatar and the coffers of its energy sector stakeholders. But was there anything much for the UK to celebrate?

Well, there was actually. A key component of the Dolphin plant is the six industrial Trent Dry Low Emission compression trains supplied by Rolls-Royce, which took its tried-and-tested aero engine technology and adapted it to the unique demands of this huge energy project.

Dolphin is one of the reasons that Rolls was last week able to poke its head above the credit crunch parapet and announce — with a suitable dose of caution — that things aren’t all that bad.

The Derby-based group’s interim financial results showed profits, sales and orders all rose in the first half of 2008. The order book showed a particularly pleasing 17 per cent increase to £53.5bn.

On the face of things, it seems odd to see a company best-known for supplying engines to the world’s commercial aircraft expressing quiet confidence for the future at exactly the same time as airlines begin mothballing planes by the dozen in the face of soaring fuel costs.

While not denying that some turbulence lies ahead, Rolls-Royce points out that if airlines are forced to ground planes they are likely to choose their older, more inefficient gas-guzzlers rather than newer aircraft that boast the latest in fuel-saving technology.

Most of Rolls’s engines fall into the latter category, and if those power systems remain in service the engineering group continues to benefit from the lucrative maintenance and service agreements that make up a big chunk of its income.

Other reasons for Rolls’s refusal to join the doom and gloom society include the international profile that has taken its engineers to Qatar and, indeed, the four corners of the earth, and the strength of its operations in fast-growing areas such as energy and marine power. The company also recently announced plans to expand its profile in civil nuclear energy.

Underlying all this is a continued expenditure on R&D to keep Rolls at the forefront of the many markets it serves.

So there we have it — ‘UK company in reasonably good news shock.’ But is it really such a shock? Regular readers of the national press have become connoisseurs of the billion-pound bank write-off, the incredible shrinking house-builder and the desperate shopkeeper.

As Rolls-Royce and many others are proving, there’s life in the productive element of our economy yet.

Andrew Lee, editor