* Demand seen growing for helicopter transport
* Opportunities identified in oil and gas market
By Maria Sheahan
PARIS, June 20 (Reuters) - Companies like Eurocopter and Sikorsky are making their helicopters faster,bigger and more comfortable to attract more customers from theoffshore oil and gas industry to generate sales as militarybudgets shrink.
Oil companies already use helicopters to ferry workers toand from offshore rigs. These choppers may rack up 1,500 hoursof flight time every year, much more than corporate or evenmilitary equivalents.
More than 62 million passengers flew to and from offshoreinstallations in the British North Sea by helicopter between1976 and 2012, according to the UK's Civil Aviation Authority.
Demand is likely to increase, with JP Morgan estimatinginvestments in offshore oil drilling will grow by just over 8percent a year on average through 2020. Mining operations alsouse helicopters extensively to reach sites.
"The oil and gas market is really where the opportunityseems to be right now," said Jean Lydon-Rodgers, president of GEAviation's military business.
In 2011, 70 percent of GE's rotorcraft engine sales were toU.S. and foreign military forces. By 2016, that figure willshrink to only 30 percent, with commercial uses and especiallythe oil and gas sector accounting for the rest.
"You're going to see this enormous shift," she said, addingoverall sales would remain stable at about 800 engines a year.
Oil majors like BP spend tens of millions of poundson helicopter flights every year, which they rent from operatorssuch as Bond Offshore or Bristow at prices around 4,000 pounds($6,270) to 4,500 pounds per hour.
"Helicopters are critical to our operations here in theNorth Sea, and we use them to transport hundreds of offshoreworkers every week," a BP spokeswoman said.
Helicopter makers are reacting to the expected growth bylaunching new models tailored for the oil and gas sector.
Eurocopter, whose large EC225 is already a standard amongoffshore helicopter operators, asked some of its customers toprovide input for the design of its new EC175, which it hopes tostart delivering early next year.
"They said they spend so much time in the helicopter, theywant, for instance, big windows and comfortable seats,"Dominique Maudet, Eurocopter's executive vice-president ofglobal business and services, said at the Paris Airshow.
"For that industry, the helicopter is a shuttle, it is likea bus," Maudet said.
INNOVATION
The oil and gas sector accounted for about 30 percent ofEurocopter's 2012 deliveries to the civil and "parapublic"sectors that include law enforcement and emergency medicalservices. Military makes up about half the firm's business.
Other demands of the oil and gas industry include flightspeed, availability of services and spare parts, safety featuresand the ability to fly long ranges as oil rigs are increasinglyset up in deep water far from shore.
"A lot of innovation is going on," said Tom Captain, globalaerospace & defence sector leader, at Deloitte Touche Tohmatsu.
Eurocopter's X3 - or "X cubed" - high-speed helicopter couldsome day be a strong contender for oil and gas companies seekingfaster travel. It can fly and descend at 50 percent higherspeeds than conventional helicopters but has a cost of operationthat is only 25 percent higher.
Its new EC175 will compete with Finmeccanica unitAgustaWestland's AW139 and Russian Helicopters' new KA-62, whichthe state-controlled Russian company was showcasing in Paris.
Russian Helicopters has already won an order for sevenKA-62s from an operator that services Petroleo Brasileiro,Brazil's state-run oil company, with an option for seven more.
"Our clear vision is that this helicopter will be in greatdemand in other regions of the world as well, such as the FarEast," Chief Executive Dmitry Petrov said.
Russian Helicopters aims to boost its civil business's shareof group sales to 50 percent in the medium term thanks to strongdemand from the oil & gas industry, he said.
Another rival, United Technologies unit Sikorsky,announced several new orders this week, including a contractwith China's CITIC Offshore Helicopter Co (COHC) for two S-92helicopters, a competitor to Eurocopter's EC225.
Sikorsky hopes the deal can break Eurocopter's dominance ofthe lucrative and rapidly growing Chinese market for offshorehelicopters.
The offshore business "has really been heating up for us inthe last couple of years," said Sikorsky President Mick Maurer.
Eurocopter suffered a setback last year after two emergencyNorth Sea ditchings rattled the oil sector's confidence in theEC225, or Superpuma, and grounded parts of the fleet. It hassaid the first of those helicopters should start flying again afew weeks from now.
BP (BP.)
