Monthly Highlights of 2018

January 2, 2019

Subsea World News has singled out the most interesting article from each month of 2018 that highlighted the subsea industry.

In the Q1 2018, we saw Kreuz Subsea securing its largest deal in the company’s history. Subsea vessels were kept busy with DOF securing work for its vessels, and Saipem acquisition of Lewek Constellation vessel.

January:

Kreuz Subsea Lands Historic Deal with L&T

Kreuz Subsea was awarded its most financially significant contract in the company’s history.

The contract, which is worth an undisclosed eight-figure sum, saw Kreuz Subsea supporting Larsen & Toubro (L&T) in installing all riser clamps, risers, crossing works, tie-ins, subsea trenching and hydro-testing of pipelines which are part of the Oil & Natural Gas Corporation’s (ONGC) pipeline replacement project (PRP4) and Daman field development projects off the west coast of India.

February:

DOF Subsea Keeps Fleet Busy

DOF Subsea was awarded various contracts, securing utilisation for vessels in the subsea IMR projects segment.

Mons S. Aase, CEO, stated: “I am pleased with the contract awards and our global organisation’s ability to secure utilization for the Group’s vessels in a challenging market.”

March:

Saipem Boosts Subsea Fleet with Lewek Constellation Buy

Saipem entered into an agreement to acquire the ultra deepwater rigid and flexible pipelay, 3000-ton heavy lift and construction vessel – Lewek Constellation.

Completed in 2013, Constellation was readily available to be promoted for commercial opportunities.

The Constellation was acquired for USD 275 million through the partial utilization of available liquidity.

The second quarter of 2018 was highlighted by the Pioneering Spirit’s completion of Line 1 of TurkStream gas pipeline in the Black Sea. Saipem received contract in the Middle East worth $1.3 billion. In the meantime Subsea 7 offered to takeover McDermott, but the offer was rejected.

April:

McDermott Rejects Subsea 7 Takeover Proposal

McDermott International has rejected Subsea 7’s offer to takeover the company.

Subsea 7 has, on Tuesday (April 17, 2018), made a proposal to acquire the entire issued share capital of McDermott for USD 7.00 per share, payable entirely in cash or up to 50% in Subsea 7 stock and the balance in cash.

On April 20, 2018, the board of directors of McDermott rejected Subsea 7’s proposal.

May:

Pioneering Spirit Delivers First Line of TurkStream

The deep-water pipelay for Line 1 of the TurkStream offshore gas pipeline across the Black Sea has been completed.

The average rate of the deep-water pipelay carried out by the pipelaying vessel Pioneering Spirit was 4.3 km/day.

The maximum pipelaying rate – 5.6 km/day – was reached twice in February 2018.

June:

Saipem Bags USD 1.3 Bln Middle East Deal

Saipem was awarded a pipeline project in the E&C offshore sector in the Middle East worth approximately $1.3 billion.

The contract involved engineering, procurement, construction and installation (EPCI) activities associated to two 32-inch export pipelines, two 24-inch corrosion-resistant alloy (CRA) intrafield pipelines, risers, spool pieces and subsea structures also entailing a short onshore section and offshore brownfield topsides modifications.

Q3 2018 was marked by the VARD sale of the diving support and construction vessel previously contracted by Harkand Group. Subsea 7 secured new contract for the execution in 2019 and 2020, while TechnipFMC secured the contract for the Zinia Phase 2 field development.

July:

TechnipFMC Nets Subsea Deal for Total’s Zinia Field

TechnipFMC was awarded a contract by Total E&P Angola for the Zinia Phase 2 field development, located offshore Angola.

The contract covered the Engineering, Procurement and Construction (EPC) of subsea equipment including nine subsea tree units as well as wellheads, subsea control systems, connection systems and associated equipment.

The contract also covered support services, performed by TechnipFMC in Angola, for the assembly, test, mobilization and installation.

August:

Subsea 7 Grabs ‘Substantial’ Contract

Subsea 7 was awarded a ‘substantial’ offshore Conventional contract with an undisclosed client.

Offshore execution is planned for 2019 and 2020.

The contract is said to be between USD 150 million and USD 300 million.

No further details have been disclosed due to contractual obligations, the company said in its Oslo stock exchange filing.

September:

VARD Sells Diving and Construction Vessel Left by Harkand

VARD signed a sales and purchase agreement (SPA) for the sale of the diving support and construction vessel previously contracted by Harkand Group.

The SPA was signed with an undisclosed international customer, the company informed.

The original contract with Harkand had been announced on December 30, 2013, followed by an update announcement in May 2016 when the company was notified that Harkand had entered into administration.

In the final quarter of 2018 BHGE, McDermott and L&T Hydrocarbon Engineering (LTHE) received the subsea contract for India’s Oil & Natural Gas Corporation’s (ONGC) largest deepwater project. In addition, Equatorial Guinea directed all petroleum operators to cancel all contracts with Subsea 7 due to noncompliance of its local content regulations.

October:

ONGC Hires BHGE, McDermott, LTHE for Largest Subsea Project in India

BHGE, McDermott and L&T Hydrocarbon Engineering (LTHE) secured the subsea contract for India’s Oil & Natural Gas Corporation’s (ONGC) largest deepwater project, the development of block DWN-98/2 in the Krishna Godavari basin.

The integrated subsea package included the supply of all subsea production systems (SPS), including 34 deepwater trees, and the installation of subsea umbilicals, risers and flowlines (SURF) at a water depth of between 300 meters and 3,200 meters.

November:

Subsea 7 Gets Equatorial Guinea Ban

Equatorial Guinea has directed all petroleum operators to cancel all contracts with Subsea 7 due to noncompliance of its local content regulations.

The African country has placed the law in 2014 under which all agreements must have local content clauses and provisions for capacity building, with preference given to local or regional companies in the award of service contracts. The law prescribes that local shareholders must be part of every contract and that the operators have an obligation to ensure compliance of their subcontractors.

December:

Saipem Lands $1.2 Billion Zohr Deal

Saipem and Petrobel have negotiated an offshore contract addendum worth more than $1.2 billion for EPCI activities in relation to the “Ramp Up to Plateau” phase of the ‘supergiant’ Zohr field development project in the Mediterranean Sea off Egypt.

The current addendum to the work includes the installation of a second 30-inch diameter gas export pipeline, infield clad lines, umbilicals and electrical/fiber optic cable, as well as EPCI work for the field development in deep water (up to 1700 metres) of 10 wells.