McDermott Expands Reach In Middle East With Saudi Deal

McDermott International Inc. has signed an agreement with Saudi Aramco in an effort to expand its capabilities and capacity in the Middle Eastern and Caspian offshore and subsea markets among others.

As part of the long-term lease signed with Saudi Aramco announced March 8, McDermott said it will build a new fabrication and marine complex expected to use state-of-the-art facilities, increased automation and an optimized layout.

“The future fabrication facility at Ras Al Khair is expected to provide up to 16-million manhours of capacity, up from 8-million manhours at McDermott’s current Jebel Ali facilities, with a gradual transition from McDermott’s operations in Jebel Ali expected by the mid-2020s,” the company said in a news release.

The Saudi Arabia facility could also assist McDermott in reaching offshore and subsea markets in the Eastern Mediterranean Sea, offshore India and East Africa, the company said

“We are excited about this strategic move and believe it expands and strengthens our ability to service all our growing Middle East markets and our decades-long leadership position with Saudi Aramco and in the Middle East,” said McDermott CEO David Dickson said in the release. “When we look at our next 50 years of business in the Middle East, we see strong benefits to moving our business operations to Saudi Arabia, including the opportunity to modernize our facilities, move closer to Saudi Aramco and other key customers in the region as well as provide McDermott’s world-class training programs to Saudi Arabia’s talented workforce to further enhance McDermott’s Middle East operations.”

Optime Subsea Taps Tautra For Chairman Role

Jarle Tautra has been appointed chairman of the board of Norwegian subsea well access company Optime Subsea AS, the company said March 7.

Described as a “seasoned industry leader,” Tautra has held executive vice president positions for Aker Solutions and Hydro as well as the CEO role at Eureka Pumps AS. He has also served as a board member for Minox Technology AS.

“Optime Subsea offers an innovative technology long sought after in the subsea industry. In addition to this, they are changing the business model of how to compete in the future subsea oil and gas industry,” Tautra said. “I look forward to supporting the company in the best way I can.”

Forum Energy Technologies Names CEO

Prady Iyyanki has been appointed as CEO and president of Houston-based Forum Energy Technologies as part of a long-planned transition, according to a news release.

Iyyanki, who currently serves as president and COO of the global oilfield products company, will succeed C. Christopher Gaut, effective May 16. Gaut will become executive chairman, the Business Wire news release said. In addition, the company’s board of directors nominated Iyyanki to stand for election as a director at the 2017 annual stockholders’ meeting in May.

Iyyanki joined Forum in 2014 after a 16-year tenure with General Electric, where he served in various senior management roles. These included president and CEO of GE Genbacher/Gas Engines from 2006 to 2011 and president and CEO of turbomachinery equipment from 2011 to 2012.

Subsea 7 Q4 2016 Earnings Beat Forecast

Subsea 7 reported forecast-beating core earnings March 2 and announced plans to pay a special dividend.

The company said its board would recommend a one-off dividend of 5 Norwegian crowns per share, equivalent to a total payout of about $200 million, reflecting a strong operating performance and good liquidity.

Subsea 7 reported adjusted earnings before interest, tax, depreciation and amortization of $288 million for the fourth quarter, 54% ahead of the average forecast of $187 million in a Reuters poll of analysts.

“This performance reflected successful implementation of our cost reduction measures, while maintaining high standards of execution and preserving the group’s expertise and capability," Subsea 7 Chief Executive Jean Cahuzac said.

Since the start of 2014, the company’s workforce has been cut by over 40% to some 8,000 by early 2017, while it has reduced its fleet by 12 vessels, including four mothballed vessels, to 33 vessels.

The company maintained its guidance for 2017 revenues to be in line with 2016 and for a drop in operating margins. It said there were prospects for an increase in subsea project awards within the next 12 months as oil prices have stabilized.

M² Subsea Names Stuart Bannerman As CFO

M² Subsea appointed Stuart Bannerman as its new CFO, according to a March 1 press release.

Bannerman has more than 30 years of executive management experience and previously was COO for BW Offshore. Prior to that, he was CFO for Remedial Offshore, and the regional CFO at Technip, the press release said.

Mike Arnold, CEO, said Bannerman's finance and business expertise, and experience in deal making and commercial management, will benefit M² Subsea.

Flowserve Appoints Jay Roueche Interim CFO

Flowserve Corp., a provider of flow control products and services, announced that John E. (Jay) Roueche III, Flowserve’s vice president, investor relations and treasurer, will assume the role of interim CFO, effective immediately.

Roueche’s appointment follows Karyn Ovelmen’s departure from the company as executive vice president and chief financial officer.

Flowserve will initiate a search to identify a permanent CFO under incoming president and CEO Scott Rowe’s direction.

Fugro Expects Offshore Services Market To Drop Further

Dutch deepsea energy prospector Fugro said it expects a further significant decline in the offshore oil and gas services market in the first half of 2017 before oil companies prepare for new investments later in the year.

Fugro is still suffering the impact of low oil prices, which have fallen by more than 50% from mid-2014 highs, affecting its business as makes it uneconomic to prospect for the hard-to-reach subsea deposits in which it specializes.

“Both the stabilization of our backlog over the last few months, and clear signs that pressure on the oil supply side is beginning to build, indicate that our market may bottom out towards year end," CEO Paul van Riel said in a statement.

The company expects its revenue to fall further in the first half of 2017. It also expects margin pressure to continue in the first half, but sees positive cash flow for the full year. It responded to a tough market by cutting 1,430 jobs during 2016 and reduced capex by 42% to 92.5 million euros. Core profit, while well down on the previous year, came in ahead of forecasts.

Dane Whitehead Joins Marathon Oil As CFO

Marathon Oil Corp. appointed Dane Whitehead as executive vice president and CFO, the Houston-based company said.

Whitehead has most recently served as executive vice president and CFO of both EP Energy Corp. (NYSE: EPE) and EP Energy LLC since May 2012. His appointment at Marathon is expected to take effect March 6.

On the effective date, Patrick J. Wagner, interim CFO, will return to his leadership role as senior vice president of corporate development and strategy.

Erin Energy CEO Segun Omidele Resigns

Erin Energy Corp., an independent exploration company focused on sub-Sahara Africa, said that Segun Omidele has resigned as CEO and as a member of the board of directors, effective Feb. 22. Omidele’s departure from the company is expected in the coming weeks while he assists in the transfer to Interim CEO Jean-Michel Malek.

Malek is senior vice president, general counsel, and secretary, and will serve while the board conducts a search for a permanent CEO.

Sembcorp Marine Swings To Profit In Q4

Singapore’s Sembcorp Marine Ltd. (SembMarine) swung to profit in fourth-quarter 2016 after provisions pulled the rig builder into a loss the year earlier, but a downturn in oil prices pushed annual revenue to its lowest in a decade.

SembMarine and compatriot Keppel Corp Ltd. have been suffering from an oversupply of offshore oil drilling rigs, with customers delaying contracts and refraining from placing orders while oil hovers at about half its 2014 peak.

SembMarine, majority-owned by conglomerate Sembcorp Industries Ltd., posted S$34 million (US$24 million) in profit for the three months through December, vs. a S$537 million loss a year prior. Revenue fell 38% to $830 million. Profit for the full year stood at S$79 million, vs. a 2015 loss of S$290 million, while revenue fell 29% to S$3.545 billion. The revenue decline was the steepest on record, and the amount was the lowest since 2006, Thomson Reuters data showed.

New orders stood at S$320 million at December-end, with net orders at S$7.8 billion. Excluding drillship orders from rig lessor Sete Brasil, which has filed for bankruptcy protection, SembMarine’s order book was worth S$4.7 billion.

Ikon Science Appoints Mark Bashforth As New CEO

Reservoir science software and services provider Ikon Science appointed Mark Bashforth as its new CEO and as a board member, according to a Feb. 27 press release.

Former CEO and company founder Martyn Millwood Hargrave becomes executive chairman following the retirement of Peter Dolan, previously non-executive chairman.

Bashforth has top management experience for several internationally known companies in the reservoir characterization sector including FEI Co., CGG Geoscience (Jason/Hampson Russell) and Roxar Software Solutions.

Seadrill Could File Chapter 11 If No Restructuring Reached With Lenders

Rig firm Seadrill, battling with $14 billion in debt and liabilities, said on Feb. 28 it may have to file for Chapter 11 bankruptcy protection if it fails to reach a restructuring agreement with its lenders, sending its shares down 14%.

Once the crown jewel in the empire of shipping tycoon John Fredriksen, Oslo-listed Seadrill’s shares have fallen 92% in the past three years as plunging crude prices and drastic spending cuts by oil companies hammered rig rates.

Seadrill's problems mirror those of another Fredriksen business, tanker firm Frontline, which had to be rescued in 2012 after a prolonged slump in rates by Hemen Holding, which manages his holdings in the listed companies he controls.

The Norwegian-born billionaire announced plans on Feb. 28 to beef up the tanker business and update its fleet while prices for vessels are low to position it for an expected recovery in rates from 2018.

But the scale of Seadrill’s liabilities dwarfs those of Frontline, and the rig company said it would be challenging to find a "fully consensual agreement" before an April 30 deadline. More than 40 banks are involved, in addition to bondholders.

In a plan made public in January, Seadrill had said it aimed to raise $1 billion in new capital, extend bank maturities, reduce fixed amortization and extend maturities of unsecured claims. But the company has so far failed to reach a deal on these terms, and Fredriksen, who holds a 23.6% stake in Frontline, now risks diluting his shareholding.

—Staff & Reuters Reports

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