From Florence: Despite the downturn in global oil and gas activity, Technip is operating with a healthy backlog of projects and continues to pick up orders.

The company has just won two lump sum contracts from Statoil for infield pipeline construction for the Norwegian sector Johan Sverdrup (SEN, 32/21) and Oseberg Vestflanken 2 (32/20) projects.

The deals cover fabrication and installation of 29 km of plastic lined 16-in. water injection flowlines for Johan Sverdrup and fabrication and installation of 7.5 km of 14-in. production pipeline and 9 km of 10-in. gas injection pipeline for Oseberg Vestflanken 2.

Technip has a portfolio of 3,000 projects of different sizes on its books and CEO Thierry Pilenko told SEN in an exclusive interview during the GE Oil & Gas Annual Meeting in Florence, “We are focussing 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 focussed on the execution of this backlog. This is what we can control.”

Pilenko said he sees opportunities away from Europe in areas like West Africa where it is supplying 120 km 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.”

Pilenko highlighted the slowdown in the Gulf of Mexico (GoM) with only the Appomattox project moving forward in 2015.

“All the other projects in the Gulf of Mexico 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.”

Forsys targets GoM

Pilenko said that during the tough times, the industry needs to drive down costs through simplification of engineering and behaviours.

He added, “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%, and you can’t just say I want 30% less because there is just not 30% fat or profit in the system.

“What you need to do is to 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 Technip’s tie-up with FMC Technologies to form Forsys Subsea comes into its own. The joint venture was initially mooted in an environment of $100-plus oil.

Pilenko said, “Already some customers were telling us ‘some offshore projects just don’t make it any more from a cost standpoint.’ The cost economics were just not working.

“Clients came to us and said what would you do to make this project work? We started with a blank sheet of paper and worked closely with clients and we could find them 20% savings pretty quickly by just supplying things that had worked with other clients and going to solutions that were less gold plated.”

He said the response to Forsys has been very positive. It is currently involved with two studies in the GoM, one with an international oil company and the other with an independent. It also is working with operators in the North Sea.

Looking to the year ahead, Pilenko said he did not expect 2016 to be much different from 2015. “It’s all about cashflow management in the very short term,” he added.

Offshore