Audun Martinsen, Rystad Energy’s head of oilfield service research, said: “This move shows that TechnipFMC is a forward-thinking company with the ability to shape the business environment it operates in. The successful integration of FMC Technologies into the Technip organisation in 2017 was impressive in its own right, creating a leading subsea entity on the global stage. Then to turn around two years later and manifest the value creation by splitting the company in two, is truly remarkable.”
In the statement, Rystad claims TechnipFMC’s subsea division has turned the company into a market leader in the subsea industry, with US$4.4 billion in revenues, ahead of rivals Subsea 7 (US$2.4 billion) and Saipem (US$2.2 billion). The success formula has been so-called integrated contracts, which allow suppliers to deliver entire subsea field development projects to oil and gas companies.
In 2016, Rystad claims integrated contracts had a market share of close to zero. Today, they constitute approximately 60% of new field developments, with TechnipFMC driving the growth.
Martinsen said: “The potential savings from integrated projects are sizeable for E&P companies and have been a big reason why larger operators tend to prefer this model on major projects. Subsea developments will be the main focus for RemainCo, which means that more resources, R&D and management attention can be devoted to accelerating this trend forward.”
SpinCo will be centered on TechnipFMC’s offshore/onshore division, which consists of engineering, procurement and construction (EPC) of surface production platforms, midstream and downstream facilities.
Historically, LNG facilities have been an attractive market for TechnipFMC, and Rystad Energy is forecasting that an incoming wave of onshore LNG developments will unlock approximately US$80 billion in contracts by 2021.
Martinsen added: “With SpinCo, TechnipFMC is seeking now to become a much more focused company. We have not yet seen large scale synergies resulting from combining subsea and surface capabilities. With this move, TechnipFMC will go in the opposite direction of its now fully-fledged competitor McDermott, which acquired Chicago Bridge & Iron Company (CB&I) last year.”
Over the course of the coming three years, Rystad Energy anticipates that the subsea market will achieve a 10% annual growth, and the EPC market to grow at 8%/yr.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/27082019/rystad-energy-discusses-recent-technipfmc-news/
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