Rigs report: Saipem share price sinks on failed capital-raising bid; Equinor restarts Peregrino production

Saipem stock was cut by nearly half after an attempt to raise about €2Bn (US$2Bn) in shareholder capital. The attempt failed to achieve the full investment, with the company only raising 70% of its intended capital, and Saipem’s stock dropped by 49% to €1.95 (US$1.99) on 12 July. The stock has dropped further, and is currently at €0.77(US$0.78) as of 20 July, prompting fears the company could be delisted. A group of major banks – BNP Paribas, HSBC, Citigroup, Deutsche Bank, Intesa Sanpaolo, UniCredit ABN AMRO, Banca Akros/BPM, Santander, Barclays, BPER, Goldman Sachs, Société Générale and Stifel – agreed to take on any unsubscribed shares to cover the outstanding capital needed for the €2Bn capital increase. In total, there was an overhang of nearly €600M.

Saipem is controlled by Italian energy group Eni and Italy’s state lender CDP. In March, the company presented a new restructuring plan to cut costs and focus more on its offshore engineering and construction business. In late June, Saipem secured contracts in the Middle East worth US$1.25Bn. Last week, Saipem and Saudi Aramco signed an agreement to set up a new Saudi-based entity.

The company’s Scarebeao 8 rig has wrapped up its North Sea drilling campaign for German oil and gas firm Wintershall Dea. Drilling operations on the Nova field have been completed ahead of first oil, which is expected at the end of July, while the water injection system is due to be completed in September.

Saipem’s semi-submersibles Scarabeo 9 and Scarabeo 5 will continue operations offshore Angola with Eni into mid and early August, respectively. These are extensions to their existing contracts and Eni has options to extend employment into mid-2023 for Scarabeo 9 and November 2022 for Scarabeo 5.

Equinor reported production in Brazil’s Peregrino field resumed on 16 July after operational issues aboard a FPSO halted production from the Campos basin field in April 2020.

Equinor has since executed a major maintenance and repair programme on the FPSO and installed a new platform, Peregrino C. Production from the new platform is expected Q3 2022.

The new platform is part of the Peregrino Phase II project which will extend the lifetime and value of the field and add 250-300M barrels.

Peregrino is the largest field operated by Equinor outside of Norway and the first of a series of major field developments in Brazil. Remaining reserves from Peregrino Phase I are estimated at 180M barrels.

Equinor awarded further work for Odfjell Drilling’s Deepsea Stavanger semi-submersible rig in the North Sea offshore Norway. The two companies entered into a contract May 2021, and the deal was awarded under an optionality clause in the contract. Odfjell said the rig has eight remaining wells to drill and expects the rig to be employed until at least Q3 2023.