Subsea 7 Bags Yet Another Deal in Africa

By Shem Oirere
Thursday, March 7, 2019

Subsea engineering, construction and services company, Subsea 7 has added yet one more feather in its Africa offshore cap after winning an engineering studies contract with a possibility of extending it to engineering, procurement, construction and installation (EPCI) phase for the SNE deepwater oil field located offshore, 100 km south of Dakar in Senegal.

The new contract, which has been awarded by Australian petroleum exploration and production company, Woodside Energy, builds on earlier similar contracts for Subsea 7 in Nigeria, Ghana and Egypt, probably an indication of growing influence of the company as an integrated project developer even as it positions itself for more offshore greenfield and brownfield assignments in Africa.

Subsea 7, which recently declared a $4.1 billion revenue for 2018 up from $3.98 billion the previous year, has been arming itself for more challenging deepwater and shallow water assignments including investing $155 million in seaway offshore cables and two vessels.

The SNE deepwater contract, valued at between $150 million to $300 million, was preceded in April 2018 by the Production Uplift Pipeline Project by Mobil Producing Nigeria in the country's shallow waters. The engineering, construction, transportation, installation and pre-commissioning of 20kms of a 24-inch Corrosion Resistant Alloys pipeline between Idoho platform and the terminal offshore in addition to a 2km of 24-inch pipeline between Edop and Idoho platforms as well as associated topside modifications and tie-ins at both ends.

In Egypt, the London-headquartered company is leading the development of the West Nile Delta (WND) Gas Development project that entails developing of a series of gas condensate fields, offshore the north coast of Egypt, where Subsea 7 won the contract for the design, procurement, fabrication, installation and pre-commissioning and support to commissioning of subsea and topsides facilities in up to 600m water depth. The contract has been awarded by BP Exploration (Delta) Ltd for the greenfield component and Brullus Gas Company Ltd for the brownfield works.

Subsea 7's involvement in offshore Africa was previously in key projects such as Jubilee Turret Remediation project in Ghana where five years ago, Tullow Ghana Limited picked it as the preferred contractor for the Tweneboa Enyenra Ntomme (TEN) Oil Field offshore Ghana in water depths reaching up to 2000 metres. Subsea 7 had partnered with Technip in this contract valued at $500 million.

Part of the assignment for Subsea 7 included engineering, procurement, fabrication, transport and installation of 36 kilometers of pipe-in-pipe flowlines, related flowline termination structures, and structure foundation piles.

Subsea 7, which currently thrives on liquidity levels of $1.2 billion, is arming itself even more for oncoming offshore assignments with the ongoing construction of the new reel-lay vessel, Seven Vega, purposely for long-distance tie-backs. Perhaps, the company, which has been awarded the SNE greenfield contract in partnership with Subsea Integration Alliance, looks ahead with optimism of further expansion especially in the anticipated additional tendering activities in Angola and Nigeria.

For 2019, Subsea 7 says there is “an increased number of large greenfield projects awarded to the market subject to sanction.” These projects, most of them awarded before the collapse of the global oil prices, could bolster near term offshore production especially in West Africa.

In addition, analysts predict the recovery of the oil prices and increasingly affordable equipment, engineering and services will support growth of Africa's offshore subsea engineering, construction and services in the medium and long-term.

Market intelligence and data analyst Westwood Global Energy Group, a subsidiary of equity firm, Energy Ventures, predicts possible booming business orders for companies such as Subsea 7 on the back of the positivity of OPEC in ensuring sustainability of the already achieved recovery of the global oil trade and the momentum of growth by the subsea and FPS market that has been recorded since 2017 with the resumption of offshore exploration/production projects awarded before the downturn in oil international oil prices.

“Exploration and production companies remain focused on capital discipline and supply chain pressures will remain with substantial excess capacity throughout the offshore supply chain,” Westwood said in its market report of early 2018.

“Deepwater activity continues and returns in some fields are more attractive than onshore shale (and) costs continue to tumble in offshore wind and many oil and gas supply chain firms are participating,” it added.

With leading oil and gas upstream project developers such as Woodside Energy describing African markets such as Senegal and Gabon as “future growth hubs” for exploration and production companies, Africa continues to hold huge potential and investment opportunities for subsea engineering and construction players going into the future.

Categories: Contracts Engineering Subsea Activity Africa

Related Stories

Shedding (Fiber) Light on Wells

Turkey Expands Drillship Fleet

Harvey Gulf Eyes International Markets

Current News

Harvey Gulf Eyes International Markets

Oil Retreats in Face of Renewed Coronavirus Uncertainty

SembMarine's Former Consultant in Brazil Gets 19 Years in Prison

Turkey Expands Drillship Fleet

Subscribe for OE Digital E‑News