Technip’s linkup with FMC Technologies last year to create Forsys Subsea and offer complete packages for subsea developments is beginning to bear fruit. The company was recently awarded a contract by Statoil, for example, to provide a FEED study for the subsea tieback of the Trestakk Field offshore Norway to the Åsgard A FPSO unit. The scope of the FEED includes all systems and related services from the wellhead to the Åsgard A riser hangoff, including umbilicals, riser, flowlines and subsea production system, installed and made ready for operation.

A key focus of the study is to arrive at an optimal technical and cost-efficient development solution as well as providing a clear and well-defined basis for the development phase. This is exactly what Forsys was set up to achieve, Technip’s CEO Thierry Pilenko said.

Finding 30%
In an exclusive interview with E&P one year after the launch of the joint venture (JV), he reiterated that the aim of the 50:50 JV is to achieve cost reductions and standardization.

Explaining how the companies had teamed up in the first place, Pilenko recalled, “We had discussions with FMC Technologies on how could we work together to reduce costs. We took some projects we had been working on—FMC for the subsea production systems and us for the SURF [subsea umbilicals, risers and flowlines]—and said ‘what if we had been involved from the conceptual stage?’ We found out we could have saved up to 30% and in some cases even more without affecting our margins.

“We looked at what we could do to make those pipeline end terminations, those manifolds, those pieces of equipment sitting on the seafloor, the redundancy of the pipeline and so forth. What could we do to make them less heavy, more fit-for-purpose [and] more compatible so that installation is accounted for from the design stage? That’s how we found the 30%.”

Early involvement
Pilenko pointed out a current fact of life—during this oil price crisis the industry needs to drive down costs further through simplification of engineering and behaviors.

“We need to adapt, and one way to do this is to push with our clients for very early involvement in projects. Clients are asking for project cost reduction in the order of 30% to 40%, but you can’t just say ‘I want 30% less,’ because there is just not 30% fat or profit in the system,” he said. “What you need to do is have systems that are simpler and more fit-for-purpose and more adapted to what the clients really want to do. To make sure we have the best impact on cost, we need to be involved at the conceptual stage.”

This is where London-headquartered Forsys Subsea—the plans for which were initially drawn up in a $100-plus per barrel oil price environment—is coming into its own.

Pilenko continued, “Already some customers were telling us that some offshore projects just didn’t make it anymore from a cost standpoint. The cost economics were just not working. Clients came to us and asked what would we do to make this project work? We started with a blank sheet of paper and worked closely with clients, and we were able to find them 20% savings pretty quickly just by supplying things that had worked with other clients and going for solutions that were less ‘gold-plated’.”

He added that the response to Forsys so far has been “very positive.” As well as the work on Trestakk, it is currently involved with two other studies in the Gulf of Mexico (GoM), one with an international oil company and the other with an independent. It also is working with other operators in the North Sea.

Healthy backlog
Despite the severe downturn in global oil and gas activity, especially offshore, Technip itself is operating with a healthy backlog of projects and continues to pick up orders. “2016 is all about cashflow management in the very short term,” Pilenko said.

The company recently won two lump-sum contracts from Statoil for infield pipeline construction for the Johan Sverdrup and Oseberg Vestflanken 2 projects in the Norwegian sector of the North Sea. The deals cover the fabrication and installation of 29 km (18 miles) of plastic-lined 16-in. water injection flowlines for Johan Sverdrup and fabrication and installation of 7.5 km (4.6 miles) of 14-in. production pipeline and 9 km (5.5 miles) of 10-in. gas injection pipeline for Oseberg Vestflanken 2.

With a portfolio of 3,000 projects of different sizes currently on its books, Pilenko said the company is “focusing on what we can control. By the end of 2014 we had a record order intake and record backlog, but that period became a little complicated with the price of oil going down. Our top priority now is to stay focused on the execution of this backlog. This is what we can control.”

Opportunities
He added that he sees continued opportunities away from Europe in established areas such as West Africa, where the company is supplying 120 km (74.5 miles) of umbilicals for the deepwater Kaombo project offshore Angola—the largest subsea contract ever awarded.

“Angola, Congo and Ghana have helped compensate for the slowdown in the North Sea. In subsea, Brazil continues to be quite resilient despite all the bad news we hear. It is a good market today and still promising tomorrow because we have positioned ourselves for the ultradeepwater presalt developments.

“Our two flexible pipe plants are very busy, and we have good long-term charters for our pipelay vessels.”

In the GoM Pilenko flagged up a slowing down in the area’s activity, with only the deepwater Appomattox project moving forward last year. “All the other projects in the GoM have been postponed, and there are no new projects being awarded in this environment. New projects like Mad Dog 2 are being delayed. Until we see a bit less uncertainty in the way the world is going, oil companies will probably be reluctant to move forward.”

Technip also sees promise in the medium term in East Africa and Mozambique, in particular for floating LNG and onshore LNG projects. “There are fewer projects in this region, but some of the ones being discussed at the moment are very high-profile, requiring a lot of technology and a good understanding of how to manage such large projects.”

Pilenko added that in terms of new projects, the gas market is going to continue to be slower because of new capacity coming from Australia with the giant Gorgon, Wheatstone and Ichthys LNG developments. “Those projects will come onstream this year or next, and you can add to that the North American LNG projects that are moving forward. At the moment there are about 62 million tonnes of LNG approved in the U.S. Those may not happen at the same time, and some may be delayed, but it is almost the same capacity as Qatar. It is a huge amount of capacity that could come from North America.”

Trimming fleet size
Technip also has undergone other measures in the current lower-for-longer price environment, with the company in the process of cutting its vessel fleet from 34 to 23 units.

Although it is not starting construction of any new vessels, it still has four pipelay units for Brazil under construction—two in Brazil and two in Norway. A dive support vessel also will soon be introduced to the North Sea market.

Pilenko added, “Now we have the fleet we need. We are not starting construction of any new vessels. The market will be sufficiently supplied for the next few years. We have just finished construction of one replacement vessel for long-term charter in West Africa. If we need to add to the fleet, we should find this capacity on the market.”

Contact the author at jsheehan@hartenergy.com.

Offshore