Eni Extends Saipem 10000 Drillship Term until 2023

Italian oil giant Eni has recently extended the contract for Saipem's Saipem 10000 drillship.

The news was shared by the Italian energy services company Saipem on Thursday in its full-year and fourth-quarter 2020 report.

"The most significant [contract] in the fourth quarter [within the offshore drilling segment] concerns the extension, until 2023, of the contract relating to the Saipem 10000 drillship for worldwide operations, on behalf of Eni," Saipem said. 

The 228 meters long drillship built by Samsung Heavy Industries in 2000 is currently located in Palermo, Sicily. 

The rig is expected to work for Eni in Egypt, and after that, wherever the Italian oil giant decides to deploy it. 

Saipem's other drillship Saipem 12000 is also on a contract with Eni in Mozambique. The contract expires in the second half of 2021, but Eni has options to extend it until 2023.

Through its offshore drilling business, Saipem in 2020 operated a fleet of 15 offshore drilling rigs of various types.

In 2020, the offshore drilling branch revenues were €294 million, down 47% compared with the same period in 2019.

Saipem attributed the revenue drop to the fact that the Saipem 10000 drillship had to undergo class reinstatement works, and that the semi-submersible rigs Scarabeo 7, Scarabeo 8, and Scarabeo 9 were idle.

"The decrease was partly compensated by greater revenues from the full activity of the semi-submersible rig Scarabeo 5, which was idle in the corresponding period of 2019, and the jack-up Sea Lion 7 which started working at the beginning of 2020," the Italian company said.

Offshore drilling revenues in the fourth quarter of 2020 were EUR 60 million, down from EUR 178 million in Q4 2019.

The company, whose Engineering & Construction division earlier this week scored a $1.7 billion contract in Qatar, also said it had sold the Scarabeo 7 semi-sub rig for dismantling in December 2020. 

The company is also looking to sell the jack-ups Perro Negro 2 and Perro Negro 5.

The offshore drilling business' backlog as at December 31, 2020, was €518 million, of which €242 million are to be realized in 2021. This amount is represented net of the cancellation of a contract, in the second quarter of 2020, worth €70 million.

Overall, including all of its business arms, Saipem's revenues in 2020 amounted to €7,3 billion, down from €9,1 billion in 2019, and adjusted EBITDA amounted to €614 million, down from €1,22 billion in 2019.

Saipem said that both indicators, for all divisions, reflected results affected by the slowdown of projects due to the effects of the pandemic and by the postponement of certain activities, agreed with clients. In addition, the offshore division is experiencing project operational difficulties, Saipem said.

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