Subsea US$4.1B earnings pushed by contracts in Guyana, Brazil – TechnipFMC

Jul 31, 2023 News

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…hopeful orders would reach US$9B this year

Kaieteur News – Oil and gas company, TechnipFMC has boosted its 2023 outlook for subsea orders to US$9 billion. The company reported a loss in the second quarter of 2023, which it said was caused by after-tax charges and credits. However, the oilfield services heavyweight revealed strong subsea orders pushed by new contracts in Guyana and Brazil.

Doug Pferdehirt, Chair and Chief Executive Officer (CEO) of TechnipFMC, stated, “Our second quarter results reflect both strong operational performance and continued delivery on our financial commitments.”

Pferdehirt continued that subsea inbound orders of US$4.1 billion were exceptionally strong in the period, April to June 2023.

Subsea orders included six integrated projects, including the direct award of the company’s largest integrated engineering, procurement, construction and installation (iEPCI™) to date, a contract from Equinor for the development in Brazil. This contract is labeled as a “major” and is said to be worth more than US$1 billion.

Another contract is the ExxonMobil Uaru Project. The company labeled this contract as “large” as it is valued between US$500 million and US$1 billion.

It was stated that the contract by ExxonMobil Corporation affiliate, Esso Exploration and Production Guyana Limited (EEPGL) is to supply the subsea production system for the Uaru project. EEPGL is the operator of Guyana’s lucrative Stabroek Block which has over 11 billion proven barrels of oil.

TechnipFMC said it will provide project management, engineering, and manufacturing to deliver the overall subsea production system. The award covers 44 subsea trees and associated tooling, as well as 12 manifolds and associated controls and tie-in equipment. It was noted that this is ExxonMobil Guyana’s first project utilizing the Subsea 2.0™ system, which leverages the Company’s configure-to-order model to deliver on an accelerated schedule.

TechnipFMC had explained in a press statement that they will provide project management, engineering, and manufacturing to deliver the overall subsea production system. Jonathan Landes, President of Subsea at TechnipFMC said, “We are very proud to continue our relationship with ExxonMobil Guyana through this award, which is our fifth within the Stabroek block. This is ExxonMobil Guyana’s first project utilizing our Subsea 2.0™ system, which leverages our configure-to-order model to deliver on an accelerated schedule.”

The remaining four projects were listed as “significant” as they are all valued between US$75 million and US$250 million.  Those contracts are: Equinor Riserless Light Well Intervention Contract (Norway), Shell Dover iEPCI™ Development (Gulf of Mexico), Woodside Julimar Phase 3 Development (Australia), Azule Energy Block 18 Infills Development (Angola) and OMV Berling Gas iEPCI™ Development (Norway).

Pferdehirt underscored that iEPCI™ contracts has accounted for more than 50% of TechnipFMC order intake. He added, “We continue to expect iEPCI™ to achieve its highest ever inbound in 2023, enabled by a record level of iFEED™ activity that often converts to direct award.”

“We continue to drive further adoption of our Subsea 2.0™ platform, with more clients recognizing the benefits of our configure-to-order product portfolio. In the quarter, we signed a 20-year frame agreement with Chevron, and we were awarded projects by Equinor and ExxonMobil that will utilize this unique technology,” he said.

Pferdehirt added, “Subsea inbound for the first half of the year totaled US$6.7 billion, giving us confidence to raise our full year outlook. We now expect orders to reach US$9 billion in 2023. We anticipate 70% of these orders will come from a combination of iEPCI™, Subsea Services and all other direct awards, highlighting the quality of our inbound.”

According to the TechnipFMC Chair, “The market backdrop remains very strong. The FEED pipeline continues to expand, with more projects in advanced stages moving towards final investment decision. Our Subsea Opportunities List, which highlights projects available over the next 24 months, remains robust. Longer-term visibility is also improving, with clients securing capacity for projects that extend to 2030. These are among the many tangible signs that support our view that this will be an extended market cycle.”

Back in May, this publication had reported on the award of the contract to TechnipFMC by ExxonMobil Guyana to supply the subsea production system for the oil giant’s fifth project (Uaru Development) in the prolific Stabroek Block.

Prior to the award of the contract, it was announced that Guyana’s Environmental Protection Agency (EPA) granted the Environmental Permit for ExxonMobil’s fifth project at the Uaru field in the Stabroek Block which has been approved. The Uaru project is expected to cost US$12.7 billion and produce about 250,000 barrels of oil per day after coming on stream in 2026.

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• Chair and Chief Executive Officer, Doug Pferdehirt, of TechnipFMC, stated

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