Marine Link
Friday, September 30, 2016

Three European firms win Angola deepwater deals

April 16, 2014

Three European companies have won contracts for almost half the value of Angola's $16 billion ultra-deepwater Kaombo oil project, confirming a trend toward bigger scale and risk for the deep-sea contracting and construction sector.

Saipem of Italy announced a $4 billion contract related to fitting out and supplying two converted oil tankers to become the Floating Production Storage and Offloading (FPSO) part of the project.

Meanwhile, Paris-listed Technip and crane-ship specialist Heerema revealed a $3.5 billion deal for subsea tubes, pipes and cables to connect the two FPSOs to the seabed two kilometres below the surface. Heerema said the contract was the biggest on record of its kind.

Kaombo's operator, French oil company Total (TOTB.F), gave the project the go-ahead earlier this week after trimming 4 billion dollars off its estimated cost.

Less ambitious design, including converting tankers instead of using purpose-built FPSOs, and Angola's relaxation of local content requirements will provide three quarters of those savings.

Total and other oil majors are reining in spending to keep shareholders happy in a potentially lower oil price world. As a result, some are using fewer oil service firms on a project and asking them to become involved at the start and stay with a project longer to share more of the risk.

Some project leaders are also ditching tailor-made designs in favour of standardised solutions, which the service companies can often more comfortably provide.

The partnership between subsea specialist Technip and privately owned Heerema, which controls some of the largest installation vessels on the water, shows how European service companies are joining forces to meet the scale now demanded.

"This project is the largest subsea contract ever awarded to Technip and strengthens our position in the ultra-deepwater market. This award further reflects the confidence of major industry players, such as Total, in the Technip Heerema alliance to address the significant challenges of ultra-deepwater projects," said Thierry Pilenko, Technip chairman and chief executive officer in a statement.

Kaombo is due to start pumping 230,000 barrels a day in 2017.

 

Reporting by Stephen Eisenhammer, Isla Binnie and Andrew Callus



Maritime Reporter Magazine Cover Sep 2016 - Maritime & Ship Security

Maritime Reporter and Engineering News’ first edition was published in New York City in 1883 and became our flagship publication in 1939. It is the world’s largest audited circulation magazine serving the global maritime industry, delivering more insightful editorial and news to more industry decision makers than any other source.

Subscribe
Maritime Reporter E-News subscription

Maritime Reporter E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

Subscribe for Maritime Reporter E-News