TechnipFMC Bets Big on Offshore Oil & Gas, Expects Billions in Orders

Researched by Industrial Info Resources (Sugar Land, Texas)--TechnipFMC plc (NYSE:FTI) (Houston, Texas) anticipates global investment in deepwater oil and gas services will grow substantially through 2025, with total investment in the second half of the decade to exceed that of the first half. The company believes an oil and gas upcycle will drive orders for its subsea businesses as high as $8 billion through 2025. Industrial Info is tracking more than $84.5 billion worth of projects worldwide involving TechnipFMC and its recent spinoff Technip Energies, including more than $12 billion worth of offshore projects, which are handled by the company still known as TechnipFMC.

Click on the image at right for a graph detailing TechnipFMC's active offshore projects worldwide, by water body.

"Subsea inbound orders were $1.1 billion [during the quarter], bringing the year-to-date segment total to $3.9 billion," said Doug Pferdehirt, the chief executive officer of TechnipFMC, in a recent quarterly earnings-related conference call. "The strength of our inbound in the quarter was driven by direct awards, subsea services, alliance partners and several long-term vessel charters. Additionally, our subsea opportunity list expanded for the fourth consecutive quarter and now shows project opportunities totaling $19 billion for potential award over the next 24 months."

He later added: "It is important to note that we expect a significant increase in order activity in the fourth quarter as we anticipate several multiyear awards will be made in the Middle East."

Among TechnipFMC's highest-profile offshore projects in North America is Royal Dutch Shell plc's (NYSE:RDS.A) (The Hague, Netherlands) Power Nap Offshore Field Development in the Gulf of Mexico, which has been under construction since August. TechnipFMC is providing engineering, procurement and construction (EPC) services. When operational, the project is expected to yield a peak output of 35,000 barrels of oil equivalent per day from the Mississippi Canyon 943 Block.

Major components of Power Nap, which are not expected to reach completion until the close of 2022 at the earliest, include $400 million in subsea infrastructure installations, including subsea templates and wellheads, and $100 million in subsea pipelines and umbilicals, with lines running 10 miles from the subsea infrastructure to Shell's Olympus Platform. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can read detailed project reports on the subsea infrastructure and pipelines and umbilicals.

TechnipFMC also is serving as a technology provider for subsea infrastructure at Beacon Offshore Energy LLC's (Houston) Shenandoah Floating Production Platform in the Gulf of Mexico, which is expected to begin construction in the first quarter of 2022. Its recoverable resources are estimated to be between 100 million and 400 million barrels. Subscribers can learn more from Industrial Info's project report.

Earlier this week, TechnipFMC announced it has landed a major contract with Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas) for work on ExxonMobil's Yellowtail Field development in the Stabroek block, offshore Guyana, where TechnipFMC already is at work on several high-profile projects for ExxonMobil. Pferdehirt said in the recent conference call that "South America is by far the most important market for our subsea business this decade," pointing to the company's close relationship with ExxonMobil as a factor driving "project performance and, hopefully, future awards in Guyana."

TechnipFMC says it will provide project management, engineering, manufacturing and testing capabilities for Yellowtail's subsea production system, which includes a floating production storage and offloading (FPSO) unit and umbilical installations. The FPSO is to be converted from a very large crude carrier (VLCC) tanker moored in the Yellowtail Field, in the Guyana-Suriname Basin. Subscribers can learn more from Industrial Info's reports on the FPSO and umbilicals.

TechnipFMC already is at work on subsea systems for ExxonMobil's Liza II FPSO and Prosperity FPSO developments in the Stabroek block. The Liza II project is expected to wrap up toward the end of 2021, around the time the Prosperity project is expected to kick off. Subscribers can learn more from Industrial Info's reports on the Liza II and Prosperity projects.

Following this decade's upcycle in offshore oil and gas production, TechnipFMC expects demand for carbon capture and sequestration (CCS) technology will grow as oil and gas volumes begin to plateau. "Growth in renewable offshore resources coupled with hydrogen storage opportunities will accelerate to meet increasing demand," said Jonathan Landes, the president of TechnipFMC's subsea business, at the company's annual investor day earlier this week. "Ultimately, we will see a new normal emerge with the continuing shift in the supply mix."

TechnipFMC believes its total addressable market for carbon transportation and storage and novel offshore energy (such as wave-and-wind, tidal and hydrogen) could reach $80 billion by the end of 2030.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.