Subsea 7 says subsea market outlook remain strong
The medium to long-term outlook for the subsea market continues to remain strong, however there is no doubt that the current economic environment is challenging. There continue to be delays in project awards and a greater pressure on margins, driven by both lower volumes of work available and a push by the operators to cut costs in the
supply chain. The Company is continuing to focus efforts on reducing costs and improving efficiencies, both within the organisation and throughout the supply chain. These initiatives, which have been implemented, will enable the Company to remain competitive in the current environment and be well-positioned to capitalise on future opportunities.
The North Sea region performed well during the quarter. Activity on Centrica’s Grove project continued, with the pipelay scope completed. Eon’s Rita project was closed out following the completion of offshore activity during the first quarter. Engineering, procurement and fabrication activity took place in respect of the F3-FA project for Venture, with offshore work being progressed for the Venture Channon / Barbarossa project. In Norway, the StatoilHydro Vega project progressed well and, at the end of the quarter, the pipelay by the Seven Navica was substantially complete. The construction vessels Seven Seas, Toisa Perseus and Seven Sisters were also committed to umbilical lay and tie-ins on the Vega project.
The Vigra spoolbase was busy during the quarter with the fabrication of pipelines for StatoilHydro’s Vega and Troll O2 projects. Project management, engineering and procurement continued on BP’s Skarv and Valhall Re-Development projects. Inspection, Repair and Maintenance (IRM) operations continued on the Shell, ConocoPhillips, Total and BP frame
agreements. The Subsea Viking completed a scheduled drydock during the quarter.
Other significant activities for the half year include the successful completion of Venture’s Chestnut P2 development and Ithaca’s Jacky project. The Rockwater 1, Toisa Polaris and Kommander Subsea vessels all completed scheduled drydocks during the first quarter.
In Africa the scope of work being undertaken for Addax Okwori, offshore Nigeria, was completed during the quarter. Operations continued on BP’s Block 18 Life of Field project, offshore Angola, and engineering and project management activities continued in respect of BP’s Block 31 contract. Chevron’s Tombua Landana contract was closed out during the quarter, with the settlement of variation orders and project costs.
Activity levels remained high in Brazil. Shell’s BC-10 project continued to progress well during the quarter, with high levels of offshore activity. StatoilHydro’s Peregrino project also progressed well during the quarter, with post-lay survey and commissioning works completed on the rigid pipelay campaign. Petrobras’ Sul Capixaba pipeline fabrication continued at the Ubu spoolbase with offshore installation planned for the third quarter of 2009. The directional drilling shore-approach and pull-back of two kilometres of pipe was successfully completed in early July. This was a significant achievement as the shore-approach scope was a technicall y challenging phase of the project. The K3000 and Lochnagar continued to support Petrobras on day-rate operations while the Normand Seven
supported the Petrobras Roncador project. The Skandi Neptune continued to support BP’s Thunder Horse project during the quarter. Engineering and project
management continued on the Petrobras Cascade project.
In America, the construction of the Port Isabel spoolbase in Texas was completed by the end of the quarter which allowed pipeline fabrication operations to commence on Marathon’s Droshky project.
Other significant activities for the half year include the successful completion of BP’s Atlantis project.
In Australia, the Rockwater 2 was in a planned drydock for 60 days and the Venturer was off-hire for a large part of the quarter due to a drydock. Accordingly, there was minimal offshore activity in the region, with the exception of some limited work for various Woodside developments in Australia. Other significant activities for the half year include the announcement in February 2009 by the Company and Technip to dissolve their joint venture, Technip Subsea 7 Asia Pacific, once it has completed all its existing projects and tendered work.
