SUBSEA SYSTEMS Sarah Parker Musarra • Houston
Technip, FMC alliance
leads to merger
The “lower for longer” scenario continues
to rearrange the offshore oil and gas corporate landscape, with one major merger called
off and another one announced just weeks
apart in May.
After forging a successful alliance through
Forsys Subsea, FMC Technologies and Technip signed a memorandum of understanding (MoU) for an all-stock merger to form
TechnipFMC. The result will be a $13 billion
company that will combine Technip’s
systems and solutions, assets, engineering strengths and project management capabilities with FMC Technologies’ technology, manufacturing, and
As of March 31, 2016, the two companies together had consolidated
backlog of approximately $20 billion.
Rystad Energy said that its latest
analysis showed that the combination
will create the second largest company in the oilfield service industry, following the failed merger attempt between Halliburton and Baker Hughes.
The analyst firm also pointed out that
this is the second time an alliance has
led to merger and acquisition activity,
following Schlumberger’s swift acquisition of Cameron.
Doug Pferdehirt, president and COO
of FMC Technologies, will serve as CEO of
“Our alliance has shown that as customers
evaluate solutions, they are involving us in the
process earlier and to a greater degree than ever
before,” he said. “The more they seek our recommendations and new products, the more we
differentiate ourselves from the competition.
“This transaction will allow us to deliver even
greater benefits to our customers through a
broadened portfolio that provides a unique set
of integrated technologies and competencies
that are underpinned by a history of develop-
ing rich partnerships and creating customer
The merged company, TechnipFMC, will
have an expected revenue of approximately $17
billion in 2016. Within the subsea space, it will
control roughly 27% of the market and supply
complete subsea production systems, SURF
and subsea life-of-field services, Rystad said.
Amol Joshi, Moody’s Vice President said:
“This combination extends the companies’
existing relationship in their Forsys joint
venture, and the positive effects of this com-
bination could support the company in the
current industry downcycle.”
FMC and Technip say that they expect to
deliver at least $400 million in annual pre-
cost savings in 2019. Jeffries International
Ltd. even called the merger “a necessary
one in the current market environment.”
Although comparisons with the Schlumberg-
er/Cameron merger are inevitable given the
similarities the merger styles, at this point, there
appears to be no reason to expect the Technip-
FMC merger to follow in the footsteps of the
doomed Halliburton/Baker Hughes merger.
Jeffries noted that it considered the risk
of Antitrust pulling the plug on the deal was
low due to the lack of product overlap.
Simmons & Co. analyst Bill Herbert told
Bloomberg that he does not expect any is-
sues faced during the failed Baker Hughes-Halliburton merger with this combination.
“The Halliburton-Baker transaction was
a multifaceted transaction encompassing
classic consolidation of several overlapping
competitive product service lines,” Herbert
said. “Technip and FTI [FMC Technologies
Inc.]? They’re completely different animals.
There is no overlap whatsoever.”
The business combination was unanimously approved by the eligible both companies’
board of directors. The transaction is expected
to close early in 2017, subject to the approval
of Technip and FMC Technologies shareholders, regulatory approvals and consents, as well
as other customary closing conditions.
Åsgard at 97% efficiency
Speaking at an Offshore Technology Conference press event, Statoil officials provided an update on what it calls the world’s first
subsea compression system, located on the
Åsgard field in the Norwegian Sea.
The facility came online in September
2015, and has been operating with an uptime
of 97%, the company said. Chief Engineer for
Subsea Technology, Statoil, Rune Ramberg
called the system one of the most technologically demanding projects ever attempted, and
said that it was running like a Swiss watch.
Both trains are now producing, with out-
put from the Midgard and Mikkel reservoirs
around 40% higher than before the install-
ment of the subsea compression system.
Ramberg recently presented on a webcast
entitled, “Gullfaks and Åsgard: advancing the
art of subsea compression.” Presented by
Offshore magazine and sponsored by Aker Solutions and the Subsea Tieback Forum & Exhibition, the webcast is accessible on-demand at
no charge through the “Webcasts” section on
Offshore magazine’s homepage.
N-Sea, DOF cooperate
Subsea inspection, maintenance, and
repair (IMR) provider N-Sea has formed
a two-year cooperation agreement with
DOF Subsea to provide an integrated
saturation (SAT) dive service.
Both companies see the cooperation
as a means of expanding their coverage
across Europe, Africa, and the Mediterranean.
DOF Subsea will supply its dive support vessel Skandi Achiever, with N-Sea
providing saturation diving. A team from
the two companies will be responsible
for project management, engineering,
and diving manual/procedures.
News of the cooperation came after
DOF Subsea announced it had secured
a number of contracts that guaranteed
full use of the company’s subsea vessel
fleet in the surrounding regions. The
wins totaled more than $61.5 million.
In the Asia/Pacific area, the contractor has
a letter of intent for an engineering, procurement, construction, and inspection project, with
the offshore phase to be conducted during 1H
2017. This includes supply chain management
services for the fabrication and supply of mooring chains and replacement of eight mooring
Offshore Ghana, DOF Subsea will install
and perform hookup of FPSO moorings for
Yinson Production for Yinson Production for
the Eni-operated Offshore Cape Three Points
field FPSO. Work is due to be performed during 4Q 2016 and 1Q 2017.
Off northwest Europe, the contractor has
won repeat subsea work from Statoil, Maersk,
and other clients, and it has picked up other
awards in the Gulf of Mexico and offshore
eastern Canada for IMR and light construction.
In the latter case, DOF Subsea will charter
the Skandi Chieftain for a 100-day job, in addition to increasing the number of ROV systems
it deploys in the region.
Separate from that wave of wins, DOF announced that Petrobras had extended the research and supply vessel contract for Geograph
as a direct continuation of the current contract.
The vessel has been operating for Petrobras
since March 2011. •
Analyst firm Rystad Energy said that the merger between FMC
Technologies and Technip to form TechnipFMC will create the
second-largest company in the oilfield service industry. The transaction is expected to close, pending all regulatory approvals and
consent, in early 2017. (Image courtesy FMC Technologies)