Spate of New Contracts Boosts TechnipFMC's Subsea Profits

TechnipFMC reported a “solid start” on operational profits thanks to subsea orders totaling $2.4 billion for the first quarter.

TechnipFMC, on track to winning $10 billion in subsea orders for 2024, introduced three integrated engineering, procurement, construction and installation (iEPCI) projects: Mero 3 HISEP, Shell Sparta and the Northern Endurance Partnership.

The projects stemmed from heightened selectivity and each represent “first-of-its-kind” solutions for the subsea industry, said Doug Pferdehirt, chairman and CEO of TechnipFMC during the company’s April 25 earnings webcast.

“And it is this unique combination of innovative technologies and integrated execution that is creating new market opportunities for our company,” Pferdehirt said.

Subsea saw first-quarter 2024 revenue of $1.73 billion. Increased project activity in Brazil and the Gulf of Mexico (GoM) was offset by lower activity in the North Sea and Asia Pacific, said Alf Melin, TechnipFMC CFO and executive vice president.

Mero 3 award

TechnipFMC announced Jan. 3 that Petrobras awarded the company an iEPCI contract to deliver the Mero 3 HISEP (high pressure separation) project in Brazil. The project uses subsea processing to capture and inject CO₂ into the reservoir.

TechnipFMC said it advanced the qualification of core technologies needed to deliver the HISEP process entirely subsea, including gas separation systems and dense gas pumps.

The contract, valued at more than $1 billion, covers the design, engineering, manufacturing and installation of manifolds, flexible and rigid pipes, umbilicals, power distribution and life of field services, TechnipFMC said.

Shell Sparta award

TechnipFMC additionally secured a contract for Shell’s Sparta GoM project. The contract, valued between $250 million and $500 million, permits TechnipFMC to use high-pressure subsea production systems rated up to 20,000 psi.

TechnipFMC will manufacture and install subsea production systems, umbilicals, risers and flowlines for Sparta.

NEP award

Leveraging TechnipFMC’s presence across the U.K., Northern Endurance Partnership, a joint venture between BP, TotalEnergies and Equinor, contracted TechnipFMC to deliver a project building an all-electric CO₂ transportation and storage infrastructure in the U.K.’s east coast cluster.

The contract covers the supply and installation of an all-electric subsea system, including manifolds, umbilicals and pipe.

“This will be the first application of an all-electric production system,” Pferdehirt said. “Think of it as everything from the shore to the seafloor. We call it the integrated carbon transport system.”

Exxon Whiptail

TechnipFMC said on April 15 it won a contract, valued at between $500 million and $1 billion, from Exxon Mobil to supply subsea production systems for the Whiptail project in Guyana’s Stabroek Block.

TechnipFMC will provide project management, engineering and manufacturing to deliver 48 subsea trees, 12 manifolds and associated tooling.

Small-scale M&A

TechnipFMC also completed the previously announced sale of its measurement solutions business for $205 million in March. A large portion of the proceeds from the sale were allocated to repurchasing $150 million worth of shares in the first quarter, the company said.

Pferdehirt said he now expects total shareholder distribution in 2024 to grow at least 70% compared to 2023.

On the M&A side, Pferdehirt said small scale acquisitions are still on the company’s radar and would consider making smaller investments in early startups, specifically those trying to enter into the subsea space.

“Often we can trade subsea engineering hours to a company who is trying to tackle the challenge of ‘How do I go from being a terrestrial developer to being an offshore developer?’ And we have that knowledge when it comes to dynamic design,” Pferdehirt said.