Commenting on unconfirmed reports that leading offshore contractors Saipem and Subsea 7 are considering a merger, Audun Martinsen, head of oilfield service research at Rystad Energy, said:
“Subsea 7 made an unsuccessful bid to merge with US rival McDermott last year. Now it could be looking at a tie-up with Italy’s Saipem, both of which have a strong standing within the so-called SURF segment – involving the construction and installation of subsea umbilicals, risers, and flowlines.”
Martinsen added: “A deal would create a truly global oilfield service giant with over $12.4 billion in revenue. The combined entity would have the world’s largest fleet of subsea installation vessels and be the largest provider of SURF services, with a market share of close to 40%. In addition, Saipem has a diverse portfolio including large-diameter pipeline installation vessels, offshore drilling rigs, one of the world’s biggest crane vessels and numerous offshore fabrication yards.”
Such a merger would create the fourth-largest oilfield service company, after Schlumberger, Halliburton and Baker Hughes.
Rystad Energy, the independent energy research and consulting firm headquartered in Norway with offices across the globe, sees this move as direct response to recent developments on several fronts in the OFS industry.
Rystad Energy, the independent energy research and consulting firm headquartered in Norway with offices across the globe, sees this move as direct response to recent developments on several fronts in the OFS industry.
“Rival contractor TechnipFMC is having great success with the integrated subsea model, which combines subsea production systems and subsea installation,” Martinsen said.
“The integrated contracts offering has pushed more risk over to the suppliers during the downturn and has been a success story for E&P companies. However, the subsea industry now faces a rising tide of new projects. It remains to be seen if anti-trust regulators will accept the creation of a company with such a large potential market share. If they decide to intervene, regulators could come to E&P’s rescue.”
By Rystad Energy
https://oilprice.com/Energy/Energy-General/Megamerger-Could-Create-The-Next-Deepwater-Oil-Giant.html