TechnipFMC targets two new Africa subsea contracts worth over $1 billion



London-based TechnipFMC has added a duo of subsea contract opportunities in Africa worth potentially more than $1 billion combined to its target list for the next two years which, in total, is estimated at nearly $25 billion.

The contractor also delivered another stable quarter, leaving its whole-year outlook unchanged and continuing to grow its subsea business backlog.

According to TechnipFMC chief executive Doug Pferdehirt, new projects include the Azule Energy-operated Ndungu field in Block 15/06 offshore Angola and BP’s Raven West Nile development offshore Egypt.

The Ndungu subsea contract could be worth between $500 million and $1 billion, while the Raven subsea award has an estimated value at $250 million to $500 million.

Brazil continues to represent the bulk of new subsea opportunities with 10 of the 34 potential contracts to be awarded over the next two years.

Brazilian state-controlled player Petrobras alone will likely be responsible for signing seven new subsea contracts, followed by European majors Shell and TotalEnergies with four each, and Eni and Equinor with three each.

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Back to its financial results, TechnipFMC announced its revenues in the first quarter swelled by over 10% against the same period of 2022 and by over 1% against the fourth quarter of the last year, to exceed $1.7 billion.

An after-tax foreign exchange gain of $3.5 million took TechnipFMC’s bottom line back into the black with net profit of $400,000 against the loss of $42 million in the first quarter of the last year and $27 million in the preceding fourth quarter.

However, without that foreign exchange gain, TechnipFMC’s bottom line was still in the red, with the net loss of $3.1 million, the company said.

Inbound orders from customers increased by 55% to almost $2.9 billion during the first quarter compared with the fourth quarter of last year.

The backlog of orders for the next three years also increased by 13% during the reporting period, with most orders placed in the subsea segment of the business.

In its results presentation, TechnipFMC identified the subsea backlog at $3.3 billion in 2023, $3.9 billion for 2024 and $2.2 billion for 2025 and onwards.

Subsea reported first-quarter revenue of $1.4 billion, an increase of 3.4% from the fourth quarter of 2022. Revenue improved sequentially largely due to an increase in project activity in Brazil and the Gulf of Mexico, partially offset by lower activity in Asia Pacific.

However, services activity continued to be impacted by seasonal factors, the contractor said.

Subsea reported an operating profit of $66.8 million, an increase of 8.6% from the fourth quarter, it added.

TechnipFMC has left unchanged its earlier 2023 full year guidance of revenues of between $5.9 billion and $6.3 billion in the subsea segment and of $1.3 billion and $1.45 billion in the surface technologies segment of its operations.

“We are experiencing a record level of integrated front end engineering design activity. This is notable as such activity often leads to a direct award for engineering, procurement, construction and installation contracts for an execution phase of the project,” Pferdehirt said.

“We continue to expect the EPCI to post record inbound orders in 2023 and to be a strong contributor to the more than $8 billion of subsea orders we expect for the full year.”