Technip CEO and chairman Thierry Pilenko says the headwinds facing the industry, both before and following the oil price collapse imply a "prolonged, harsh slowdown" in many parts of the oil and gas industry.
Pilenko, outlining the firm's 2014 results, said back in July 2014, the firm "identified significant headwinds" in the oil and gas services business, with client capax discipline as well as "some irrational behavior from some competitors."
Image: Technip's Deep Blue, which has been working on the Delta House project in the US Gulf of Mexico.
"Since then the oil price fall gas added to these concerns and our clients are putting increasing pressure on their supply chains," says Pilenko. "This implies a prolonged, harsh slowdown in many parts of our industry."
Despite the headwinds, Technip took in €15.3 billion in orders in 2014, taking its back log to a record €20.9 billion. The firm's subsea business performed "ahead of expectations" across all regions with an adjusted operating margin of 15.3%, up on 12% the previous year.
But, Pilenko said the firm has reacted to the market conditions, reducing selling, general and administrative expenses by €69 million in 2014, cutting staffing from 40,000 in Q2 2014 to 38,200 at year end. Non-core activities have been exited, and the firm's fleet "substantially reduced" to 27 vessels.
Capex discipline would continue and the €314 million spent in 2014 was expected to be lower in 2015 and 2016.
However, Pilenko said the firm would continue to develop staff and would "view the current market as an opportunity to hire additional exceptional people into Technip."