OneSubsea and Subsea 7 entered into an agreement to form a non-incorporated alliance to design, develop and deliver integrated subsea development solutions for the oil and gas industry.
Image from Subsea 7.
The duo will focus on combining subsurface expertise, subsea production systems (SPS), subsea processing systems, subsea umbilicals, risers and flowlines systems (SURF), and life-of-field services.
Subsea 7 will bring its experience and technology in seabed to surface engineering, construction and life-of-field services, while OneSubsea’s reservoir expertise and state-of-the-art subsea production and processing systems technologies will be used as assets. Both companies will collaborate to use their expertise on selected projects, engaging early to improve field development planning from the reservoir to the production facility.
“The technology and expertise from Subsea 7 perfectly complements OneSubsea’s Pore to Process business strategy to offer a holistic approach to subsea development solutions,” Mike Garding, OneSubsea CEO said. “Our established competencies in subsurface modeling and production systems engineering will be further strengthened by integrating the SURF expertise provided by Subsea 7. By integrating these key areas of expertise, we can further reduce risk and uncertainty to deliver the optimal solution for our clients to produce cost-effectively from subsea reservoirs.”
“This combination of subsurface, SPS, SURF and life-of-field expertise is unique in its breadth of integrated service offering and provides clients with the opportunity to significantly improve subsea field economics over the lifetime of the development. I am looking forward to developing further our relationship with OneSubsea as we will be able to capitalize on the synergies between our strong technology portfolios and develop joint technologies to improve our offering for our clients,” Jean Cahuzac, Subsea 7 CEO said.
The move, by the London-headquartered by Luxumberg registered subsea, umbilicals, risers and flowlines (SURF) firm and OneSubsea, follows a string of alliances and joint ventures, including the formation of OneSubsea, a Cameron and Schlumberger joint ventures, back in 2013.
Since then, other alliances and joint ventures have been formed as companies look to offer integrated solutions, reducing interfaces and seeking to develop new solutions by bringing together otherwise siloed divisions.
The need to cut spending was being felt back in 2013, as subsea development costs had escalated, even before the fall in oil prices from $110/bbl at its peak in 2014 to the current ca.$60/bbl, which has put such initiatives into sharp focus amid job losses throughout the industry. In May, Subsea 7 said it would be cutting its workforce by 20% (2500 jobs) and its fleet by 28% (11 of 39 vessels). OneSubsea's CEO Mark Garding told a conference last month, UTC Bergen, that $100/bbl could not be counted on returning any time soon.
Others also forming alliances and joint ventures include, in 2014, Aker Solutions and Baker Hughes, who agreed to a subsea production solutions alliance, OneSubsea, Helix Energy Solutions and Schlumberger, who agreed a Subsea Services Alliance.
In 2015, Saipem and Xodus Group launched a new firm Xodus Subsea, Petrofac and McDermott International agreed a deepwater SURF marketing alliance, FMC Technologies and Technip formed an alliance creating a new company, Forsys Subsea and GE Oil & Gas and McDermott launched a new oilfield consultancy io oil & gas consulting.
OneSubsea says Subsea 7's its SURF business compliments OneSubsea's Pore to Process strategy. According to Mike Garding, CEO, OneSubsea: "By integrating these key areas of expertise, we can further reduce risk and uncertainty to deliver to optimal solution for our clients."
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