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Better profitability next year
Posted 02.11.2011 09:36:02 av John Bradbury
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Subsea 7 chief Jean Cahuzac says next year should see better profitability for his company in the North Sea after pressure on margins from contracts awarded in 2010.

Although Subsea 7 has seen higher activity levels in the North Sea this year Cahuzac said this was not all good. “The higher activity levels in the North Sea are, as expected, still impacted by margin pressure on contracts awarded in 2010,” Cahuzac stated today as Subsea 7 published its third quarter results. “Operational delays on projects in the North Sea have also impacted these results.”

Looking forward to 2012, Cahuzac continued: “2012 will be a year of progress for Subsea 7 but it will also be a transition year. West Africa will move through a period of lower offshore activity on those projects awarded over the past 18 months. We also foresee an above average impact arising from planned dry docks while in the North Sea we expected to see improved margins year-on-year.”

Analysing market trends, Subsea 7 suggested tendering levels in the North Sea remain strong,  “...with improved pricing for those projects which are offshore in 2012 and beyond.”

“In West Africa, we expect a number of major SURF [subsea umbilicals risers and flowlines] contracts to come to market award in the next six months with offshore execution in 2013 and 2014,” the company stated today. “In the Gulf of Mexico, we see an increase of activity with contract awards in 2012 and execution late 2013 and 2014 in a market which remains competitive. In Brazil, we continue to see more opportunities ahead, in traditional deepwater, as well as the pre-salt developments.”

Turning to the Asia-Pacific market, Subsea 7 says the market there “remains competitive,” and further, gas-driven SURF opportunities are anticipated offshore Australia,  coming to the market for award in 2012, and with associated offshore work in 2013 and later.

Subsea 7 reported revenue at US $1.432 billion for the three months to September and $4.059 bn for first three quarters of 2011 which reflected performance after the merger with Acergy which was finalised in January this year.

Net income for the third quarter was $173 million and $344 m for a ten-month period to September.
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