New subsea contracts and projects boosted the results of several OSV and specialised vessel owners in the third quarter, with strong tendering activity creating an upbeat outlook for the remainder of the year
In disclosing his company’s results for Q3 2019, TechnipFMC chairman and chief executive Doug Pferdehirt reported subsea revenue was US$1.342Bn for Q3 2019, up 11% year-on-year (yoy) from the same period in 2018, but profitability slipped due to “the impact of more competitively priced backlog and a higher proportion of projects in early phases.”
With a subsea backlog of US$8.6Bn, Mr Pferdehirt says: “We believe that our order growth for the full year will exceed 50% – the highest annual growth rate in a decade. Our anticipated growth is more than double the expectation for the total subsea market.”
TechnipFMC’s subsea vessel utilisation was 70% for the quarter, up from 69% in Q2 2019.
One project highlighted by TechnipFMC was the completion of an initial campaign by its flagship 206.5-m pipelay and construction vessel Deep Blue in support of Equinor’s Peregrino project in Brazil. In July, the vessel had been contracted to install rigid and flexible pipelines and PLET structures in water of 100 m about 85 km off the coast of Rio de Janeiro.
With an investment of US$3.5Bn, Norwegian energy major Equinor is developing Peregrino Phase 2, adding a third fixed wellhead platform to the field. Equinor estimates that the second phase will add 273M barrels of recoverable oil to the Peregrino field, with production starting at the end of 2020. The Peregrino field consists of two fixed wellhead platforms and a floating production storage and offloading (FPSO) unit.
Built in 2000 by South Korea’s Hyundai Heavy Industries and based on a Gusto 10000 design, Deep Blue has the capability to use reel-lay and J-lay pipelaying methods to install all types of risers and flowlines and can lay umbilicals and flexibles from below-deck carousels.
Deep Blue will participate in an installation phase that will take place across two campaigns.
In H1 2020, TechnipFMC is set to split into two separate companies. It will spin-off Technip Energies, a pure engineering and construction player supporting onshore and offshore oil and gas opportunities, LNG development and alternative energy. The remaining company, called Technip, will be a fully integrated technology and services provider to oil and gas companies.
The Q3 results continue a trend cited earlier by independent energy research consultancy Rystad Energy, which pegged subsea equipment and SURF as the best-performing segments, with growth rates exceeding 10% on a yearly basis in the second quarter. Rystad Energy said it expects “2019 to be the first year with subsea revenue growth since 2014.”
Long-term IRM contract in Middle East
In the Middle East, a joint venture between Singapore exchange-listed Mermaid Maritime and a local offshore services operator has secured a three-year contract extension for offshore inspection, maintenance and repair (IRM) services. The contract, with a national oil company, is in direct continuation to its initial seven-year contract period. To support the contract, Mermaid will continue to provide a suite of diving services using its dynamic position (DP) class 2-capable saturation dive support vessel Mermaid Asiana, along with remotely operated vehicles (ROVs), specialised diving equipment and divers.
Mermaid’s joint venture partner will provide other offshore vessel-related services and logistics. Mermaid has served this contract since 2012.
Scheduled to start in Q4 2019, the three-year contract extension will generate about US$162M for Mermaid.
Mermaid chief executive Chalermchai Mahagitsiri says the contract will generate “a stream of stable revenue over the next three financial years” and allow the OSV owner to maintain its presence in the region and offer “a platform for further growth and expansion.”
Mermaid notes that the contract extension for the Middle East IRM work scope was secured at lower day rates.
Subsea activity and civil engineering work in the Middle East will keep Dutch IMR provider N-Sea busy over the next several months, after its Dubai division secured contracts worth in excess of US$15M.
For ROV, diving and survey projects, N-Sea deploys the dynamic positioning (DP) class 2-capable multi-purpose support vessel (MPSV) Noordhoek Pathfinder. With a length overall of 62 m and beam of 12.8, Noordhoek Pathfinder has integrated diving systems, a vessel-mounted ultra-short baseline (USBL) system, multi-beam, sub-bottom profiler, ROV and ROTV capabilities.
N-Sea’s flagship is Siem N-Sea, a DP-2 class dive and construction support vessel that carries a +1A1 ice C supply vessel oilrec SF class notation. Equipped with an offshore crane with a capacity of 100 tonnes, 21-m helideck, moonpool and various ROV and diving systems, Siem N-Sea is a highly capable and versatile vessel. The MPSV has an overall length of 93.6 m beam of 19.7 m and draught of 7.85 m.
Under its Middle East contracts, N-Sea will provide complete saturation and air diving scopes in Egypt and conduct pipeline decommissioning and spool piece installations in Abu Dhabi. It will also start two civil engineering jobs: one involving site investigations for a port and industrial zone developer, again in Abu Dhabi; and jetty repairs for a national operator in Sharjah.