High Offshore Activity Keeps Subsea 7 'On Track'

UK-based oilfield services business Subsea 7 reported Monday that it is on track to deliver a profit in line with expectations thanks to high offshore activity.

Announcing its third quarter results, Subsea 7 said that good progress was made on a number of projects in the North Sea. Engineering and procurement continued for Total's Martin Linge gas field development project in the Norwegian zone of the North Sea, which is due to move into its offshore phase during 2014.

In Africa, the quarter saw Subsea 7 benefit from high activity levels and good timing of settlements with its clients. Progress was made during the quarter on the engineering and procurement for the Lianzi SURF project, off the coast of Angola and Congo, which moves into its offshore phase during the second half of 2014. Offshore Nigeria, progress was made on engineering and procurement for the Erha North project.

In Asia, Sapura 3000 successfully completed the offshore scope of the Gumusut project offshore Malaysia. In Australia, progress was made on the Gorgon Heavy Lift and Tie-Ins projects with offshore installation scheduled to begin in 4Q 2013.

In Brazil, Subsea 7 continues to work closely with Petrobras to complete what it described as the "challenging" offshore phase of the Guara-Lula NE project – where adverse weather conditions have continued to hamper progress.

In the North Sea, Subsea 7 warned that although the level of tendering continues to be good, elsewhere the industry is characterized by delays in project awards. It added that some North Sea operators have indicated that rising costs could result in the award of new projects being postponed.

For the three months to September 30 Subsea 7's revenue amounted to $1.6 billion, compared with $1.7 billion in 3Q 2012. The firm's adjusted EBITDA was $359 million (3Q 2012: $318 million).

Subsea 7's backlog of orders at the end of September was $3 billion more than a year earlier at $11.8 billion.

Subsea 7 Chief Executive Jean Cahuzac commented in a company statement:

"We have delivered good financial results and are on track to deliver full-year adjusted EBITDA in line with consensus expectations. These results reflect high offshore activity, project phasing in West Africa and high vessel utilization in the North Sea."

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