Subsea 7 has streamlined its offshore construction and subsea maintenance work into one division as it tackles the challenges of the coronavirus pandemic and downturn in oil and gas development spending
The subsea construction vessel owner and charterer aligned its flowlines, risers and umbilicals business with offshore life-of-field work in January 2021, to focus on delivering “subsea field of the future - systems and delivery”. This combines subsea and conventional field development, and ongoing inspection, repair and maintenance (IRM) into one division.
“It has encompassed our full portfolio of services and products dedicated to the oil and gas industry, allowing us to streamline the organisation and maximise potential synergies between the two areas,” said Subsea 7 chief executive John Evans.
“This includes greater integration of IRM and well intervention into the integrated field development solutions created by Subsea Integration Alliance to provide a holistic offering across the lifecycle of our clients’ fields,” he explained. “It will also enable us to accelerate our drive to digitalise field developments.”
In January 2021, Subsea 7 also consolidated its renewables and heavy lifting business unit. This came as the Oslo-listed company reported it had incurred US$70M in costs associated with the Covid-19 pandemic and US$86M in restructuring charges.
“In a challenging 12 months Subsea 7 responded well,” said Mr Evans. “The Covid-19 pandemic required radical changes to operations and had an adverse effect on the market for our oil and gas businesses,” he explained. “In response, we booked incremental operating costs, restructured our cost base, and recognised material impairments to goodwill and asset values.
“Yet we continued to deliver projects to our clients, generated positive cash flow, reduced debt and increased our backlog. We completed 20 projects in the year for 15 clients in 10 countries.”
Subsea 7 reported its backlog had risen 20% year-on-year to US$6.2Bn by the end of 2020, of which around US$4Bn is expected to be executed in 2021.
In Q4 2020, Subsea 7 made good progress on several projects. In Angola, Ulstein-designed Seven Borealis completed its scope of work on Zinia, alongside Seven Arctic and Simar Esperanca, which continued operations into Q1 2021.
In the Gulf of Mexico, Seven Oceans and Seven Pacific continued offshore activities on BP’s Mad Dog 2 project.
In Brazil, Seven Seas completed its scope on Lapa NE, and pipeline and subsea construction vessels on long-term charter to Petrobras continued to achieve high utilisation.
“We were also active on several projects in the UK North Sea, with tie-in activity on Arran, the completion of bundle fabrication for Penguins, and the completion of pipelay operations at Blythe,” said Mr Evans.
“Good progress continues to be made in the engineering and procurement phases of Sangomar in Senegal, as well as Anchor, King’s Quay and Jack St Malo in the Gulf of Mexico.”
Overall, utilisation of Subsea 7’s active fleet was 82% in Q4 2020, compared to 71% in the prior year period. This was driven by higher utilisation of vessels involved in field life extension projects and deepwater pipelay work in Brazil.
At 31 December 2020, the active fleet comprised 30 vessels.
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